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[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 1416 Reported in Senate (RS)]

<DOC>

                                                       Calendar No. 132
116th CONGRESS
  1st Session
                                S. 1416

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

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                              May 9, 2019

Mr. Cornyn (for himself, Mr. Blumenthal, Mrs. Capito, Mrs. Murray, Mr. 
 Scott of Florida, Mr. Kennedy, Mr. Hawley, and Mr. Durbin) introduced 
the following bill; which was read twice and referred to the Committee 
                            on the Judiciary

                June 28 (legislative day, June 27), 2019

               Reported by Mr. Graham, with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 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,

<DELETED>SECTION 1. SHORT TITLE.</DELETED>

<DELETED>    This Act may be cited as the ``Affordable Prescriptions 
for Patients Act of 2019''.</DELETED>

<DELETED>SEC. 2. PRODUCT HOPPING; PATENT THICKETING.</DELETED>

<DELETED>    (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:</DELETED>

<DELETED>``SEC. 27. PRODUCT HOPPING; PATENT THICKETING.</DELETED>

<DELETED>    ``(a) Definitions.--In this section:</DELETED>
        <DELETED>    ``(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).</DELETED>
        <DELETED>    ``(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)).</DELETED>
        <DELETED>    ``(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)).</DELETED>
        <DELETED>    ``(4) Competition window.--The term `competition 
        window' means--</DELETED>
                <DELETED>    ``(A) with respect to a listed drug, the 
                period between--</DELETED>
                        <DELETED>    ``(i) the date that is the earlier 
                        of--</DELETED>
                                <DELETED>    ``(I) 8 years before any 
                                patent or marketing exclusivity granted 
                                under chapter V of the Federal Food, 
                                Drug, and Cosmetic Act (21 U.S.C. 351 
                                et seq.) with respect to such listed 
                                drug expires; and</DELETED>
                                <DELETED>    ``(II) the date on which 
                                the first abbreviated new drug 
                                application that references such listed 
                                drug is filed; and</DELETED>
                        <DELETED>    ``(ii) the later of--</DELETED>
                                <DELETED>    ``(I) the date that is 180 
                                days after the first abbreviated new 
                                drug application that references such 
                                listed drug is filed; and</DELETED>
                                <DELETED>    ``(II) the date that is 1 
                                year after the date on which the 
                                generic drug that is the subject of the 
                                abbreviated new drug application 
                                described in subclause (I) enters the 
                                marketplace; or</DELETED>
                <DELETED>    ``(B) with respect to a reference product, 
                the period between--</DELETED>
                        <DELETED>    ``(i) the date that is the earlier 
                        of--</DELETED>
                                <DELETED>    ``(I) 6 years before any 
                                patent or marketing exclusivity 
                                (including any extension of such 
                                exclusivity) granted under section 351 
                                of the Public Health Service Act (42 
                                U.S.C. 262) or section 527 of the 
                                Federal Food, Drug, and Cosmetic Act 
                                (21 U.S.C. 360cc) with respect to such 
                                reference product expires; 
                                and</DELETED>
                                <DELETED>    ``(II) the date on which 
                                the first biosimilar biological product 
                                license application that references 
                                such reference product is filed; 
                                and</DELETED>
                        <DELETED>    ``(ii) the later of--</DELETED>
                                <DELETED>    ``(I) the date that is 180 
                                days after the date on which the first 
                                biosimilar biological product license 
                                application that references such 
                                reference product enters the 
                                marketplace; and</DELETED>
                                <DELETED>    ``(II) the date that is 1 
                                year after the date on which the 
                                biosimilar biological product that is 
                                the subject of the biosimilar 
                                biological product license application 
                                described in subclause (I) enters the 
                                marketplace.</DELETED>
        <DELETED>    ``(5) Expected revenue.--The term `expected 
        revenue', with respect to a follow-on product, means the 
        financial value represented by the number of individuals in the 
        target population multiplied by the financial revenue generated 
        by each member of the target population over the 3-year period 
        beginning--</DELETED>
                <DELETED>    ``(A) on the day that 3 generic drugs 
                referencing the same listed drug or 2 or more 
                biosimilar biological products referencing the same 
                reference product would have been widely available in 
                the market; or</DELETED>
                <DELETED>    ``(B) if 3 or more generic drugs 
                referencing the same listed drug or 2 or more 
                biosimilar biological products referencing the same 
                reference product are already widely available in the 
                market, the day that the follow-on product enters the 
                market.</DELETED>
        <DELETED>    ``(6) Follow-on product.--The term `follow-on 
        product' 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.</DELETED>
        <DELETED>    ``(7) Generic drug.--The term `generic drug' means 
        a drug approved under subsection (b)(2) or (j) of section 505 
        of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
        355).</DELETED>
        <DELETED>    ``(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)).</DELETED>
        <DELETED>    ``(9) Patent family.--The term `patent family' 
        means a group of related patents that continue the priority 
        date of the underlying composition of matter patent, all of 
        which claim the same drug or biological product or a use of the 
        same drug or biological product.</DELETED>
        <DELETED>    ``(10) Patent portfolio.--The term `patent 
        portfolio' means a group of related patents covering the same 
        or similar technical content.</DELETED>
        <DELETED>    ``(11) Patent thicketing.--</DELETED>
                <DELETED>    ``(A) In general.--The term `patent 
                thicketing' means an action taken to limit competition 
                by a patentee with respect to a drug approved under 
                section 505(c) of the Federal Food, Drug, and Cosmetic 
                Act (21 U.S.C. 355(c)) or a biological product licensed 
                under section 351(a) of the Public Health Service Act 
                (42 U.S.C. 262(a)) in which--</DELETED>
                        <DELETED>    ``(i)(I) the patentee obtains 
                        patents in the same patent family or patent 
                        portfolio--</DELETED>
                                <DELETED>    ``(aa) that claim the drug 
                                or biological product or a use of the 
                                drug or biological product, a form of 
                                the drug or biological product, a 
                                method of use of the drug or biological 
                                product, or a method of manufacture of 
                                a drug or biological product; 
                                and</DELETED>
                                <DELETED>    ``(bb) whose effective 
                                filing date does not precede the date 
                                of filing the application under section 
                                505(b) of the Federal Food, Drug, and 
                                Cosmetic Act (21 U.S.C. 355(b)) or 
                                section 351(a) of the Public Health 
                                Service Act (42 U.S.C. 262(a)); 
                                or</DELETED>
                        <DELETED>    ``(II) the underlying composition 
                        of matter patent is found invalid and the 
                        patentee obtains patents in the same patent 
                        family or patent portfolio that claim the drug 
                        or biological product or a use of the drug or 
                        biological product, a form of the drug or 
                        biological product, a method of use of the drug 
                        or biological product, or a method of 
                        manufacture of the drug or biological 
                        product;</DELETED>
                        <DELETED>    ``(ii) an abbreviated new drug 
                        application referencing such approved drug or a 
                        biosimilar biological product license 
                        application referencing such licensed 
                        biological product could not be marketed 
                        without practicing one or more of the 
                        inventions claimed in the additional patents 
                        described in subclause (I) or (II) of clause 
                        (i); and</DELETED>
                        <DELETED>    ``(iii) the Commission determines 
                        that the patentee improperly limited 
                        competition by obtaining patents described in 
                        subclause (I) or (II) of clause (i).</DELETED>
                <DELETED>    ``(B) Factors to consider.--The Commission 
                may establish that an action described in subparagraph 
                (A) improperly limits competition if the Commission 
                establishes a reasonable number of the following 
                factors in a manner that is sufficient to demonstrate 
                anticompetitive intent:</DELETED>
                        <DELETED>    ``(i) The additional patents 
                        described in subparagraph (A)(i) (referred to 
                        in this subparagraph as the `additional 
                        patents') stem from few patent 
                        families.</DELETED>
                        <DELETED>    ``(ii) The additional patents have 
                        common specifications.</DELETED>
                        <DELETED>    ``(iii) The additional patents did 
                        not issue on an application with respect to 
                        which a requirement for restriction under 
                        section 121 of title 35, United States Code, 
                        has been made, or on an application filed as a 
                        result of such a requirement.</DELETED>
                        <DELETED>    ``(iv) The additional patents have 
                        overlapping or identical claims.</DELETED>
                        <DELETED>    ``(v) The additional patents have 
                        been granted to the patentee on formulations or 
                        compositions of the product and not 
                        used.</DELETED>
                        <DELETED>    ``(vi) One or more of the 
                        additional patents have been invalidated in an 
                        inter partes review conducted under chapter 31 
                        of title 35, United States Code, or a post-
                        grant proceeding conducted under chapter 32 of 
                        that title.</DELETED>
                        <DELETED>    ``(vii) Litigation with applicants 
                        under section 351(k) of the Public Health 
                        Service Act has been extended based on the 
                        additional patents.</DELETED>
                        <DELETED>    ``(viii) The applications with 
                        respect to the additional patents described in 
                        subclause (I) or (II) of subparagraph (A)(i) 
                        are submitted not more than 36 months before 
                        the expiration of the underlying composition of 
                        matter patent.</DELETED>
                        <DELETED>    ``(ix) A public or internal 
                        statement, a shareholder call, or another 
                        demonstration of purpose that the patentee 
                        intended to use the number of patents or length 
                        of extended patent protection in order to 
                        unduly limit competition.</DELETED>
        <DELETED>    ``(12) 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)).</DELETED>
        <DELETED>    ``(13) Target population.--The term `target 
        population', with respect to a drug, means the population of 
        individuals that--</DELETED>
                <DELETED>    ``(A) would experience a significant 
                health improvement from a follow-on product; 
                and</DELETED>
                <DELETED>    ``(B) would have bought the follow-on 
                product solely because of the significant health 
                improvement that those individuals would 
                experience.</DELETED>
        <DELETED>    ``(14) 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.</DELETED>
        <DELETED>    ``(15) Underlying composition of matter patent.--
        The term `underlying composition of matter patent' means a 
        patent with respect to the molecules, compounds, or new 
        formulations of the active ingredient of a drug or biological 
        product.</DELETED>
<DELETED>    ``(b) Prohibitions.--</DELETED>
        <DELETED>    ``(1) Patent thicketing.--</DELETED>
                <DELETED>    ``(A) Prima facie.--Except as provided in 
                subparagraph (B), an action by a drug manufacturer that 
                constitutes patent thicketing shall be considered to be 
                an unfair method of competition in or affecting 
                commerce in violation of section 5(a).</DELETED>
                <DELETED>    ``(B) Rebuttal.--</DELETED>
                        <DELETED>    ``(i) In general.--Subject to 
                        subparagraph (C), an action that constitutes 
                        patent thicketing shall not be considered to be 
                        an unfair method of competition in or affecting 
                        commerce in violation of section 5(a) if the 
                        manufacturer described in that paragraph 
                        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)(A), or in a suit brought under 
                        subparagraph (B) or (C) of subsection (c)(1), 
                        that the anticompetitive effects of the action 
                        do not outweigh the pro-competitive effects of 
                        the action.</DELETED>
                        <DELETED>    ``(ii) Evidence.--In making a 
                        demonstration under clause (i) that the 
                        anticompetitive effects of patent thicketing do 
                        not outweigh the pro-competitive effects of 
                        that behavior, a manufacturer described in 
                        subparagraph (A)--</DELETED>
                                <DELETED>    ``(I) may present evidence 
                                that--</DELETED>
                                        <DELETED>    ``(aa) the 
                                        inventions claimed in the 
                                        additional patents described in 
                                        subclauses (I) and (II) of 
                                        subsection (a)(11)(A)(i) 
                                        resulted in--</DELETED>

                                                <DELETED>    ``(AA) 
                                                clinically meaningful 
                                                and significant 
                                                therapeutic or safety 
                                                benefits;</DELETED>

                                                <DELETED>    ``(BB) 
                                                significantly improved 
                                                product purity or 
                                                potency;</DELETED>

                                                <DELETED>    ``(CC) 
                                                significant gained 
                                                efficiencies in 
                                                manufacturing; 
                                                or</DELETED>

                                                <DELETED>    ``(DD) 
                                                other improved product 
                                                attributes having 
                                                substantial benefits 
                                                for consumers or 
                                                patients;</DELETED>

                                        <DELETED>    ``(bb) a generic 
                                        drug or biosimilar biological 
                                        product could be marketed 
                                        commercially without 
                                        incorporating the improvements 
                                        claimed in the additional 
                                        patents described in item (aa); 
                                        or</DELETED>
                                        <DELETED>    ``(cc) for each of 
                                        the later filed patents, the 
                                        manufacturer had substantial 
                                        financial reason, apart from 
                                        the financial effects of 
                                        reduced competition, to file 
                                        each of the patents; 
                                        and</DELETED>
                                <DELETED>    ``(II) in making a 
                                demonstration under subclause (I), 
                                shall submit to the Commission or the 
                                court, as applicable, all research and 
                                development, manufacturing, marketing, 
                                and other costs associated with 
                                approval of the original drug under 
                                section 505(c) of the Federal Food, 
                                Drug, and Cosmetic Act (21 U.S.C. 
                                355(c)) or licensure of the original 
                                biological product under section 351(a) 
                                of the Public Health Service Act (42 
                                U.S.C. 262(a)), which--</DELETED>
                                        <DELETED>    ``(aa) shall 
                                        include--</DELETED>

                                                <DELETED>    ``(AA) any 
                                                documents relating to 
                                                the costs and benefits 
                                                of the later filed 
                                                patents with respect to 
                                                patients who use the 
                                                drug; and</DELETED>

                                                <DELETED>    ``(BB) any 
                                                applications for 
                                                patents that were filed 
                                                and rejected; 
                                                and</DELETED>

                                        <DELETED>    ``(bb) shall not 
                                        be construed to limit the 
                                        information that the Commission 
                                        or the court, as applicable, 
                                        may otherwise obtain in any 
                                        proceeding or action instituted 
                                        with respect to a violation of 
                                        this section.</DELETED>
                <DELETED>    ``(C) Response.--The Commission may rebut 
                any evidence presented by a drug manufacturer under 
                subparagraph (B) by establishing by a preponderance of 
                the evidence that the harm to consumers from the action 
                that is the subject of that presentation is greater 
                than the benefits to consumers from that 
                action.</DELETED>
        <DELETED>    ``(2) Product hopping.--</DELETED>
                <DELETED>    ``(A) Prima facie.--Except as provided in 
                subparagraph (B), any of the following actions by a 
                manufacturer of a reference product or listed drug 
                shall be considered to be an unfair method of 
                competition in or affecting commerce in violation of 
                section 5(a):</DELETED>
                        <DELETED>    ``(i) If, during the period 
                        beginning on the date on which the manufacturer 
                        of the reference drug 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 180 days after the date on which that 
                        generic drug or biosimilar biological product 
                        first enters, or could enter, the market, or is 
                        denied--</DELETED>
                                <DELETED>    ``(I) upon the request of 
                                the manufacturer of the listed drug or 
                                reference product, the Commissioner of 
                                Food and Drugs--</DELETED>
                                        <DELETED>    ``(aa) withdraws 
                                        the approval of the application 
                                        for the listed drug or 
                                        reference product; or</DELETED>
                                        <DELETED>    ``(bb) places the 
                                        listed drug or reference 
                                        product on the discontinued 
                                        products list; or</DELETED>
                                <DELETED>    ``(II) the manufacturer of 
                                the listed drug or reference product 
                                announces discontinuance of, or intent 
                                to withdraw, the application for the 
                                reference product.</DELETED>
                        <DELETED>    ``(ii) The manufacturer of a 
                        previously approved drug or biological product 
                        markets or sells a follow-on product during the 
                        competition window.</DELETED>
                <DELETED>    ``(B) Rebuttal.--</DELETED>
                        <DELETED>    ``(i) In general.--Subject to 
                        subparagraph (C), an action described in 
                        subparagraph (A) shall not be considered to be 
                        an unfair method of competition in or affecting 
                        commerce if--</DELETED>
                                <DELETED>    ``(I) with respect to an 
                                action described in subparagraph 
                                (A)(i), the manufacturer of the listed 
                                drug or reference product 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)(A), or in a 
                                suit brought under subparagraph (B) or 
                                (C) of subsection (c)(1), that the 
                                manufacturer removed such drug from the 
                                market for significant and documented 
                                safety reasons; or</DELETED>
                                <DELETED>    ``(II) with respect to an 
                                action described in subparagraph 
                                (A)(ii)--</DELETED>
                                        <DELETED>    ``(aa) 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)(A), or 
                                        in a suit brought under 
                                        subparagraph (B) or (C) of 
                                        subsection (c)(1), that--
                                        </DELETED>

                                                <DELETED>    ``(AA) the 
                                                follow-on product 
                                                described in such 
                                                subparagraph (A)(ii) 
                                                (referred to in this 
                                                subclause as the 
                                                `follow-on product') 
                                                provides a clinically 
                                                meaningful and 
                                                significant additional 
                                                health benefit to the 
                                                target population 
                                                beyond that provided by 
                                                the previously approved 
                                                drug or biological 
                                                product;</DELETED>

                                                <DELETED>    ``(BB) the 
                                                follow-on product was 
                                                the available means 
                                                that was least likely 
                                                to reduce competition; 
                                                and</DELETED>

                                                <DELETED>    ``(CC) the 
                                                manufacturer had 
                                                substantive financial 
                                                reasons, apart from the 
                                                financial effects of 
                                                reduced competition, to 
                                                introduce the follow-on 
                                                product to the market; 
                                                and</DELETED>

                                        <DELETED>    ``(bb) in making 
                                        the demonstration required 
                                        under item (aa), the 
                                        manufacturer provides to the 
                                        Commission--</DELETED>

                                                <DELETED>    ``(AA) all 
                                                research and 
                                                development, 
                                                manufacturing, 
                                                marketing, and other 
                                                related costs 
                                                associated with the 
                                                drug or biological 
                                                product previously 
                                                approved under section 
                                                505(c) of the Federal 
                                                Food, Drug, and 
                                                Cosmetic Act (21 U.S.C. 
                                                355(c)) or section 
                                                351(a) of the Public 
                                                Health Service Act (42 
                                                U.S.C. 262(a)) and the 
                                                follow-on product, 
                                                including all 
                                                documents, memos, or 
                                                other business 
                                                documents that explain, 
                                                mention, or otherwise 
                                                justify the decision of 
                                                the manufacturer to 
                                                develop and manufacture 
                                                the follow-on product; 
                                                and</DELETED>

                                                <DELETED>    ``(BB) the 
                                                revenue obtained by the 
                                                manufacturer with 
                                                respect to the drug or 
                                                biological product 
                                                previously approved 
                                                under section 505(c) of 
                                                the Federal Food, Drug, 
                                                and Cosmetic Act (21 
                                                U.S.C. 355(c)) or 
                                                section 351(a) of the 
                                                Public Health Service 
                                                Act (42 U.S.C. 262(a)) 
                                                and the expected 
                                                revenue of the 
                                                manufacturer with 
                                                respect to the 
                                                previously approved 
                                                drug or biological 
                                                product and the follow-
                                                on product.</DELETED>

                        <DELETED>    ``(ii) Rule of construction.--
                        Nothing in clause (i) 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.</DELETED>
                <DELETED>    ``(C) Response.--The Commission may rebut 
                any evidence presented by a drug manufacturer under 
                subparagraph (B) by establishing by a preponderance of 
                the evidence that--</DELETED>
                        <DELETED>    ``(i) the harm to consumers of the 
                        drug or biological product that is the subject 
                        of the product from the action that is the 
                        subject of that presentation is greater than 
                        the benefits to consumers of the drug or 
                        biological product that is the subject of 
                        challenged action; or</DELETED>
                        <DELETED>    ``(ii) a primary purpose of the 
                        manufacturer in pursuing the challenged action 
                        was to block or otherwise hinder the entry into 
                        the market of a generic drug or biosimilar 
                        biological product.</DELETED>
<DELETED>    ``(c) Enforcement.--</DELETED>
        <DELETED>    ``(1) In general.--If the Commission has reason to 
        believe that any drug manufacturer has violated, is violating, 
        or is about to violate this section, the Commission may take 
        any of the following actions:</DELETED>
                <DELETED>    ``(A) Institute a proceeding--</DELETED>
                        <DELETED>    ``(i) that, except as provided in 
                        paragraph (2), complies with the requirements 
                        under section 5(b); and</DELETED>
                        <DELETED>    ``(ii) in which the Commission may 
                        impose on the manufacturer any penalty that the 
                        Commission may impose for a violation of 
                        section 5.</DELETED>
                <DELETED>    ``(B) In the same manner and to the same 
                extent as provided in section 13(b), bring suit in a 
                district court of the United States to temporarily 
                enjoin the action of the drug manufacturer.</DELETED>
                <DELETED>    ``(C)(i) Bring suit in a district court of 
                the United States to permanently enjoin the action of 
                the drug manufacturer.</DELETED>
                <DELETED>    ``(ii) In a suit brought under clause (i), 
                the Commission may seek--</DELETED>
                        <DELETED>    ``(I) any of the remedies 
                        described in paragraph (3); and</DELETED>
                        <DELETED>    ``(II) any other equitable remedy, 
                        including ancillary equitable relief.</DELETED>
        <DELETED>    ``(2) Judicial review.--</DELETED>
                <DELETED>    ``(A) In general.--Notwithstanding any 
                provision of section 5, any drug manufacturer that is 
                subject to a final order of the Commission that is 
                issued in a proceeding initiated under paragraph (1)(A) 
                may, not later than 30 days after the date on which the 
                Commission issues the order, petition for review of the 
                order in--</DELETED>
                        <DELETED>    ``(i) the United States Court of 
                        Appeals for the District of Columbia Circuit; 
                        or</DELETED>
                        <DELETED>    ``(ii) the court of appeals of the 
                        United States for the circuit in which the 
                        ultimate parent entity of the manufacturer is 
                        incorporated, as of the date on which the 
                        manufacturer obtains the underlying composition 
                        of matter patent with respect to the proceeding 
                        or files a new drug application under section 
                        505(b) of the Federal Food, Drug, and Cosmetic 
                        Act (21 U.S.C. 355(b)) or biological product 
                        license application under section 351(a) of the 
                        Public Health Service Act (42 U.S.C. 262(a)) 
                        that is the subject of the proceeding, as 
                        applicable.</DELETED>
                <DELETED>    ``(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.</DELETED>
        <DELETED>    ``(3) Equitable remedies.--</DELETED>
                <DELETED>    ``(A) Disgorgement.--</DELETED>
                        <DELETED>    ``(i) In general.--In a suit 
                        brought under paragraph (1)(C), the Commission 
                        may seek, and the court may order, disgorgement 
                        of any unjust enrichment that a person obtained 
                        as a result of the violation that gives rise to 
                        the suit in which the Commission seeks the 
                        claim.</DELETED>
                        <DELETED>    ``(ii) Calculation.--Any 
                        disgorgement that is ordered with respect to a 
                        person under clause (i) shall be offset by any 
                        amount of restitution that the person is 
                        ordered to pay under subparagraph 
                        (B).</DELETED>
                        <DELETED>    ``(iii) Limitations period.--The 
                        Commission may bring a claim for disgorgement 
                        under this subparagraph not later than 5 years 
                        after the latest date on which the person 
                        against which the claim is brought receives any 
                        unjust enrichment from the effects of the 
                        violation that gives rise to the suit in which 
                        the Commission seeks the claim.</DELETED>
                <DELETED>    ``(B) Restitution.--</DELETED>
                        <DELETED>    ``(i) In general.--In a suit 
                        brought under paragraph (1)(C), the Commission 
                        may seek, and the court may order, restitution 
                        with respect to the violation that gives rise 
                        to the suit in which the Commission seeks the 
                        claim.</DELETED>
                        <DELETED>    ``(ii) Limitations period.--The 
                        Commission may bring a claim for restitution 
                        under this subparagraph not later than 5 years 
                        after the latest date on which the person 
                        against which the claim is brought receives any 
                        unjust enrichment from the effects of the 
                        violation that gives rise to the suit in which 
                        the Commission seeks the claim.</DELETED>
        <DELETED>    ``(4) Rules of construction.--Nothing in this 
        subsection may be construed as--</DELETED>
                <DELETED>    ``(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</DELETED>
                <DELETED>    ``(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.''.</DELETED>
<DELETED>    (b) Applicability.--Section 27 of the Federal Trade 
Commission Act, as added by subsection (a), shall apply with respect to 
any--</DELETED>
        <DELETED>    (1) conduct that occurs on or after the date of 
        enactment of this Act; and</DELETED>
        <DELETED>    (2) action or proceeding that is commenced on or 
        after the date of enactment of this Act.</DELETED>
<DELETED>    (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.</DELETED>
<DELETED>    (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.</DELETED>

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Affordable Prescriptions for 
Patients 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(b)) 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 medical condition; and
                    ``(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).
            ``(5) 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).
            ``(6) 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)).
            ``(7) 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)).
            ``(8) 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)).
            ``(9) 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) if the 
        Commission demonstrates by a preponderance of the evidence in a 
        proceeding initiated by the Commission under subsection 
        (c)(1)(A), 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 180 days after the 
        date on which that generic drug or biosimilar biological 
        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 following 
                actions:
                            ``(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 the manufacturer marketed or 
                        sold a follow-on product.
                            ``(ii) The manufacturer of the listed drug 
                        or reference product--
                                    ``(I)(aa) announced withdrawal of, 
                                discontinuance of the manufacture of, 
                                or intent to withdraw 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; 
                                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 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 a generic drug or 
                        a biosimilar biological product that is highly 
                        similar to, and has no clinically meaningful 
                        difference with respect to safety, purity, and 
                        potency from, the reference 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)(A), 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), 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), the Commission may--
                    ``(A) rebut any evidence presented by a 
                manufacturer during that justification; or
                    ``(B) establish by a preponderance of the evidence 
                that, on balance, 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) In general.--If the Commission has reason to believe 
        that any manufacturer has violated, is violating, or is about 
        to violate this section, the Commission may take any of the 
        following actions:
                    ``(A) Institute a proceeding--
                            ``(i) that, except as provided in paragraph 
                        (2), complies with the requirements under 
                        section 5(b); and
                            ``(ii) in which the Commission may impose 
                        on the manufacturer any penalty that the 
                        Commission may impose for a violation of 
                        section 5.
                    ``(B) In the same manner and to the same extent as 
                provided in section 13(b), bring suit in a district 
                court of the United States to temporarily enjoin the 
                action of the manufacturer.
                    ``(C) Bring suit in a district court of the United 
                States, in which the Commission may seek--
                            ``(i) to permanently enjoin the action of 
                        the manufacturer;
                            ``(ii) any of the remedies described in 
                        paragraph (3); and
                            ``(iii) any other equitable remedy, 
                        including ancillary equitable relief.
            ``(2) Judicial review.--
                    ``(A) In general.--Notwithstanding any provision of 
                section 5, any manufacturer that is subject to a final 
                order of the Commission that is issued in a proceeding 
                instituted under paragraph (1)(A) 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) Equitable remedies.--
                    ``(A) Disgorgement.--
                            ``(i) In general.--In a suit brought under 
                        paragraph (1)(C), the Commission may seek, and 
                        the court may order, disgorgement of any unjust 
                        enrichment that a person obtained as a result 
                        of the violation that gives rise to the suit.
                            ``(ii) Calculation.--Any disgorgement that 
                        is ordered with respect to a person under 
                        clause (i) shall be offset by any amount of 
                        restitution ordered under subparagraph (B).
                            ``(iii) Limitations period.--The Commission 
                        may seek disgorgement under this subparagraph 
                        not later than 5 years after the latest date on 
                        which the person from which the disgorgement is 
                        sought receives any unjust enrichment from the 
                        effects of the violation that gives rise to the 
                        suit in which the Commission seeks the 
                        disgorgement.
                    ``(B) Restitution.--
                            ``(i) In general.--In a suit brought under 
                        paragraph (1)(C), the Commission may seek, and 
                        the court may order, restitution with respect 
                        to the violation that gives rise to the suit.
                            ``(ii) Limitations period.--The Commission 
                        may seek restitution under this subparagraph 
                        not later than 5 years after the latest date on 
                        which the person from which the restitution is 
                        sought receives any unjust enrichment from the 
                        effects of the violation that gives rise to the 
                        suit in which the Commission seeks the 
                        restitution.
            ``(4) 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).

SEC. 3. TITLE 35 AMENDMENTS.

    (a) In General.--Section 271(e) of title 35, United States Code, is 
amended--
            (1) in paragraph (2)(C), in the flush text following clause 
        (ii), by adding at the end the following: ``With respect to a 
        submission described in clause (ii), the act of infringement 
        shall extend to any patent that claims the biological product, 
        a method of using the biological product, or a method or 
        product used to manufacture the biological product.''; and
            (2) by adding at the end the following:
    ``(7)(A) Subject to subparagraphs (C), (D), and (E), if the sponsor 
of an approved application for a reference product, as defined in 
section 351(i) of the Public Health Service Act (42 U.S.C. 262(i)) 
(referred to in this paragraph as the `reference product sponsor'), 
brings an action for infringement under this section against an 
applicant for approval of a biological product under section 351(k) of 
such Act that references that reference product (referred to in this 
paragraph as the `subsection (k) applicant'), the reference product 
sponsor may assert in the action a total of not more than 20 patents of 
the type described in subparagraph (B), not more than 10 of which shall 
have issued after the date specified in section 351(l)(7)(A) of such 
Act.
    ``(B) The patents described in this subparagraph are patents that 
satisfy each of the following requirements:
            ``(i) Patents that claim the biological product that is the 
        subject of an application under section 351(k) of the Public 
        Health Service Act (42 U.S.C. 262(k)) (or a use of that 
        product) or a method or product used in the manufacture of such 
        biological product.
            ``(ii) Patents that are included on the list of patents 
        described in section 351(l)(3)(A) of the Public Health Service 
        Act (42 U.S.C. 262(l)(3)(A)), including as provided under 
        section 351(l)(7) of such Act.
            ``(iii) Patents that--
                    ``(I) have an actual filing date of more than 4 
                years after the date on which the reference product is 
                approved; or
                    ``(II) include a claim to a method in a 
                manufacturing process that is not used by the reference 
                product sponsor.
    ``(C) The court in which an action described in subparagraph (A) is 
brought may increase the number of patents limited under that 
subparagraph--
            ``(i) if the request to increase that number is made 
        without undue delay; and
            ``(ii)(I) if the interest of justice so requires; or
            ``(II) for good cause shown, which--
                    ``(aa) shall be established if the subsection (k) 
                applicant fails to provide information required under 
                section 351(l)(2)(A) of the Public Health Service Act 
                (42 U.S.C. 262(l)(2)(A)) that would enable the 
                reference product sponsor to form a reasonable belief 
                with respect to whether a claim of infringement under 
                this section could reasonably be asserted; and
                    ``(bb) may be established--
                            ``(AA) if there is a material change to the 
                        biological product (or process with respect to 
                        the biological product) of the subsection (k) 
                        applicant that is the subject of the 
                        application;
                            ``(BB) if, with respect to a patent on the 
                        supplemental list described in section 
                        351(l)(7)(A) of Public Health Service Act (42 
                        U.S.C. 262(l)(7)(A)), the patent would have 
                        issued before the date specified in such 
                        section 351(l)(7)(A) but for the failure of the 
                        Office to issue the patent or a delay in the 
                        issuance of the patent, as described in 
                        paragraph (1) of section 154(b) and subject to 
                        the limitations under paragraph (2) of such 
                        section 154(b); or
                            ``(CC) for another reason that shows good 
                        cause, as determined appropriate by the court.
    ``(D) In determining whether good cause has been shown for the 
purposes of subparagraph (C)(ii)(II), a court may consider whether the 
reference product sponsor has provided a reasonable description of the 
identity and relevance of any information beyond the subsection (k) 
application that the court believes is necessary to enable the court to 
form a belief with respect to whether a claim of infringement under 
this section could reasonably be asserted.
    ``(E) The limitation imposed under subparagraph (A)--
            ``(i) shall apply only if the subsection (k) applicant 
        completes all actions required under paragraphs (2)(A), 
        (3)(B)(ii), (5), (6)(C)(i), (7), and (8)(A) of section 351(l) 
        of the Public Health Service Act (42 U.S.C. 262(l)); and
            ``(ii) shall not apply with respect to any patent that 
        claims, with respect to a biological product, a method for 
        using that product in therapy, diagnosis, or prophylaxis, such 
        as an indication or method of treatment or other condition of 
        use.''.
    (b) Applicability.--The amendments made by subsection (a) shall 
apply with respect to an application submitted under section 351(k) of 
the Public Health Service Act (42 U.S.C. 262(k)) on or after the date 
of enactment of this Act.
                                                       Calendar No. 132

116th CONGRESS

  1st Session

                                S. 1416

_______________________________________________________________________

                                 A BILL

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

_______________________________________________________________________

                June 28 (legislative day, June 27), 2019

                       Reported with an amendment
```