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

<DOC>

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 and Mr. Blumenthal) introduced the following 
    bill; which was read twice and referred to the Committee on the 
                               Judiciary

_______________________________________________________________________

                                 A BILL

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

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

SECTION 1. SHORT TITLE.

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

SEC. 2. PRODUCT HOPPING; PATENT THICKETING.

    (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; PATENT THICKETING.

    ``(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) Competition window.--The term `competition window' 
        means--
                    ``(A) with respect to a listed drug, the period 
                between--
                            ``(i) the date that is the earlier of--
                                    ``(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
                                    ``(II) the date on which the first 
                                abbreviated new drug application that 
                                references such listed drug is filed; 
                                and
                            ``(ii) the later of--
                                    ``(I) the date that is 180 days 
                                after the first abbreviated new drug 
                                application that references such listed 
                                drug is filed; and
                                    ``(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
                    ``(B) with respect to a reference product, the 
                period between--
                            ``(i) the date that is the earlier of--
                                    ``(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
                                    ``(II) the date on which the first 
                                biosimilar biological product license 
                                application that references such 
                                reference product is filed; and
                            ``(ii) the later of--
                                    ``(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
                                    ``(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.
            ``(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--
                    ``(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
                    ``(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.
            ``(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.
            ``(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).
            ``(8) Listed drug.--The term `listed drug' means a drug 
        listed under section 505(j)(7) of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 355(j)(7)).
            ``(9) 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.
            ``(10) Patent portfolio.--The term `patent portfolio' means 
        a group of related patents covering the same or similar 
        technical content.
            ``(11) Patent thicketing.--
                    ``(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--
                            ``(i)(I) the patentee obtains patents in 
                        the same patent family or patent portfolio--
                                    ``(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
                                    ``(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
                            ``(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;
                            ``(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
                            ``(iii) the Commission determines that the 
                        patentee improperly limited competition by 
                        obtaining patents described in subclause (I) or 
                        (II) of clause (i).
                    ``(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:
                            ``(i) The additional patents described in 
                        subparagraph (A)(i) (referred to in this 
                        subparagraph as the `additional patents') stem 
                        from few patent families.
                            ``(ii) The additional patents have common 
                        specifications.
                            ``(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.
                            ``(iv) The additional patents have 
                        overlapping or identical claims.
                            ``(v) The additional patents have been 
                        granted to the patentee on formulations or 
                        compositions of the product and not used.
                            ``(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.
                            ``(vii) Litigation with applicants under 
                        section 351(k) of the Public Health Service Act 
                        has been extended based on the additional 
                        patents.
                            ``(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.
                            ``(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.
            ``(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)).
            ``(13) Target population.--The term `target population', 
        with respect to a drug, means the population of individuals 
        that--
                    ``(A) would experience a significant health 
                improvement from a follow-on product; and
                    ``(B) would have bought the follow-on product 
                solely because of the significant health improvement 
                that those individuals would experience.
            ``(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.
            ``(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.
    ``(b) Prohibitions.--
            ``(1) Patent thicketing.--
                    ``(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).
                    ``(B) Rebuttal.--
                            ``(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.
                            ``(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)--
                                    ``(I) may present evidence that--
                                            ``(aa) the inventions 
                                        claimed in the additional 
                                        patents described in subclauses 
                                        (I) and (II) of subsection 
                                        (a)(11)(A)(i) resulted in--

                                                    ``(AA) clinically 
                                                meaningful and 
                                                significant therapeutic 
                                                or safety benefits;

                                                    ``(BB) 
                                                significantly improved 
                                                product purity or 
                                                potency;

                                                    ``(CC) significant 
                                                gained efficiencies in 
                                                manufacturing; or

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

                                            ``(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
                                            ``(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
                                    ``(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--
                                            ``(aa) shall include--

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

                                                    ``(BB) any 
                                                applications for 
                                                patents that were filed 
                                                and rejected; and

                                            ``(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.
                    ``(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.
            ``(2) Product hopping.--
                    ``(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):
                            ``(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--
                                    ``(I) upon the request of the 
                                manufacturer of the listed drug or 
                                reference product, the Commissioner of 
                                Food and Drugs--
                                            ``(aa) withdraws the 
                                        approval of the application for 
                                        the listed drug or reference 
                                        product; or
                                            ``(bb) places the listed 
                                        drug or reference product on 
                                        the discontinued products list; 
                                        or
                                    ``(II) the manufacturer of the 
                                listed drug or reference product 
                                announces discontinuance of, or intent 
                                to withdraw, the application for the 
                                reference product.
                            ``(ii) The manufacturer of a previously 
                        approved drug or biological product markets or 
                        sells a follow-on product during the 
                        competition window.
                    ``(B) Rebuttal.--
                            ``(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--
                                    ``(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
                                    ``(II) with respect to an action 
                                described in subparagraph (A)(ii)--
                                            ``(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--

                                                    ``(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;

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

                                                    ``(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

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

                                                    ``(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

                                                    ``(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.

                            ``(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.
                    ``(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--
                            ``(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
                            ``(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.
    ``(c) Enforcement.--
            ``(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:
                    ``(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 drug manufacturer.
                    ``(C)(i) Bring suit in a district court of the 
                United States to permanently enjoin the action of the 
                drug manufacturer.
                    ``(ii) In a suit brought under clause (i), the 
                Commission may seek--
                            ``(I) any of the remedies described in 
                        paragraph (3); and
                            ``(II) any other equitable remedy, 
                        including ancillary equitable relief.
            ``(2) Judicial review.--
                    ``(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--
                            ``(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, 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.
                    ``(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 in 
                        which the Commission seeks the claim.
                            ``(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).
                            ``(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.
                    ``(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 in 
                        which the Commission seeks the claim.
                            ``(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.
            ``(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.
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