I 
115TH CONGRESS 
1ST SESSION H. R. 4117 
To prohibit brand name drug companies from compensating generic drug 
companies to delay the entry of a generic drug into the market, and 
for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
OCTOBER 25, 2017 
Mr. DOGGETT (for himself, Mr. CUMMINGS, Ms. DELAURO, Ms. SCHA-
KOWSKY, Mr. POCAN, Ms. JUDY CHU of California, Mr. CICILLINE, Mr. 
COHEN, Mr. CONYERS, Mr. ELLISON, Mr. GRIJALVA, Ms. KAPTUR, Mr. 
KHANNA, Mr. LANGEVIN, Mr. NADLER, Mrs. NAPOLITANO, Mr. 
O’ROURKE, Ms. PINGREE, Ms. CASTOR of Florida, Mr. RASKIN, and Ms. 
VELA´ZQUEZ) introduced the following bill; which was referred to the 
Committee on Ways and Means, and in addition to the Committees on 
the Judiciary, and Energy and Commerce, for a period to be subsequently 
determined by the Speaker, in each case for consideration of such provi-
sions as fall within the jurisdiction of the committee concerned 
A BILL 
To prohibit brand name drug companies from compensating 
generic drug companies to delay the entry of a generic 
drug into the market, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Competitive Deals Re-
sulting in Unleashed Generics and Savings Act of 2017’’ 
or the ‘‘Competitive DRUGS Act of 2017’’. 
SEC. 2. CLAWBACK OF RESEARCH AND DEVELOPMENT TAX 
BENEFITS FOR MANUFACTURERS ENGAGING 
IN PAY-FOR-DELAY. 
(a) IN GENERAL.—Section 41 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new subsection: 
‘‘(i) RECAPTURE.— 
‘‘(1) IN GENERAL.—If the Federal Trade Com-
mission determines under section 27 of the Federal 
Trade Commission Act that the taxpayer violated 
section 5 of such Act in connection with the sale of 
a drug product (as defined in such section), then the 
tax under this chapter for the taxable year which in-
cludes the date of such determination shall be in-
creased by the sum of the product for each of the 
2 relevant years of— 
‘‘(A) the aggregate decrease in the credits 
allowed under section 38 for such relevant year 
which would have resulted solely from reducing 
to zero any credit determined under this sec-
tion, multiplied by 
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‘‘(B) the sales ratio for such drug product 
for such relevant year. 
‘‘(2) RELEVANT YEAR.—For purposes of this 
subsection, the term ‘relevant year’ means, with re-
spect to any determination by the Federal Trade 
Commission described in paragraph (1), a taxable 
year in which the aggregate decrease in the credits 
allowed under section 38 which would have resulted 
solely from reducing to zero any credit determined 
under this section is one of the two highest such de-
creases during the 10-year period ending with the 
last taxable year that ended before the date of such 
determination. 
‘‘(3) SALES RATIO.—For purposes of this sub-
section, the term ‘sales ratio’ means, with respect to 
a drug product sold by a taxpayer in a taxable year, 
the ratio of— 
‘‘(A) the revenue from sales of such drug 
product by such taxpayer during such taxable 
year, to 
‘‘(B) the total revenue from sales of all 
drug products by such taxpayer during such 
taxable year. 
‘‘(4) CONSENT DECREES DEEMED TO BE VIOLA-
TIONS.—If a taxpayer enters into a consent decree 
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with respect to any proceeding initiated by the Fed-
eral Trade Commission under section 27 of the Fed-
eral Trade Commission Act, such consent decree 
shall be treated for purposes of this subsection as if 
the Commission had determined under such section 
that the taxpayer violated section 5 of such Act in 
connection with the sale of the drug product to 
which such proceeding relates. 
‘‘(5) RECAPTURE NOT TAKEN INTO ACCOUNT IN 
DETERMINING MAXIMUM PENALTY.—The increase in 
tax under this subsection shall not be treated as a 
penalty for purposes of section 27(f) of the Federal 
Trade Commission Act.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years ending after the 
date of the enactment of this Act. 
SEC. 3. DISALLOWANCE OF TAX DEDUCTION FOR CIVIL 
PENALTIES IN CONNECTION WITH ACTIONS 
FOR UNLAWFUL COMPENSATION FOR DELAY. 
(a) IN GENERAL.—Section 162(f) of the Internal 
Revenue Code of 1986 is amended— 
(1) by striking ‘‘for any fine’’ and inserting 
‘‘for— 
‘‘(1) any fine’’; and 
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(2) by striking the period at the end and insert-
ing ‘‘, and’’; and 
(3) by adding at the end the following new 
paragraph: 
‘‘(2) any civil penalties paid or incurred in con-
nection with a judgment in, or settlement of, a pro-
ceeding under section 27 of the Federal Trade Com-
mission Act.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years ending after the 
date of the enactment of this Act. 
SEC. 4. UNLAWFUL COMPENSATION FOR DELAY. 
(a) IN GENERAL.—The Federal Trade Commission 
Act (15 U.S.C. 44 et seq.) is amended by inserting after 
section 26 (15 U.S.C. 57c–2) the following: 
‘‘SEC. 
27. 
PRESERVING 
ACCESS 
TO 
AFFORDABLE 
GENERICS. 
‘‘(a) IN GENERAL.— 
‘‘(1) ENFORCEMENT PROCEEDING.—The Com-
mission may initiate a proceeding to enforce the pro-
visions of this section against the parties to any 
agreement resolving or settling, on a final or interim 
basis, a patent infringement claim, in connection 
with the sale of a drug product. 
‘‘(2) VIOLATION.— 
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‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), in such a proceeding, an agreement 
shall be an unfair method of competition in or 
affecting commerce and be a violation of section 
5 if pursuant to the agreement— 
‘‘(i) an ANDA filer receives anything 
of value, including an exclusive or non-ex-
clusive license, an agreement regarding the 
marketing of a product, or any other com-
mercial opportunity or benefit; and 
‘‘(ii) the ANDA filer agrees to limit or 
forgo research, development, manufac-
turing, marketing, or sales of the ANDA 
product for any period of time. 
‘‘(B) 
EXCEPTION.—Subparagraph 
(A) 
shall not apply if the parties to such agreement 
demonstrate by clear and convincing evidence 
that— 
‘‘(i) the value described in subpara-
graph (A)(i) is compensation solely for 
other goods or services that the ANDA 
filer has promised to provide; or 
‘‘(ii) the procompetitive benefits of the 
agreement outweigh the anticompetitive ef-
fects of the agreement. 
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‘‘(b) LIMITATIONS.—In determining whether the set-
tling parties have met their burden under subsection 
(a)(2)(B), the fact finder may not presume— 
‘‘(1) that entry of the ANDA product into 
interstate commerce would not have occurred until 
the expiration of the relevant patent or statutory ex-
clusivity; or 
‘‘(2) that the agreement’s provision for entry of 
the ANDA product into interstate commerce prior to 
the expiration of the relevant patent or statutory ex-
clusivity means that the agreement is procom-
petitive. 
‘‘(c) EXCLUSIONS.—Nothing in this section shall pro-
hibit a resolution or settlement of a patent infringement 
claim in which the consideration granted to the ANDA 
filer as part of the resolution or settlement includes one 
or more of the following and nothing else: 
‘‘(1) The right to market the ANDA product in 
the United States prior to the expiration of— 
‘‘(A) any patent that is the basis for the 
patent infringement claim; or 
‘‘(B) any patent right or other statutory 
exclusivity that would prevent the marketing of 
such drug. 
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‘‘(2) A payment, not to exceed $7,500,000, if 
based on reasonable litigation expenses. 
‘‘(3) A covenant not to sue (including any 
agreement to dismiss) on any claim that the ANDA 
product infringes a United States patent. 
‘‘(d) JUDICIAL REVIEW.— 
‘‘(1) IN GENERAL.—Any party that is subject 
to a final order of the Commission, issued in an ad-
ministrative adjudicative proceeding under the au-
thority of subsection (a)(1), may, within 30 days 
after the issuance of such order, petition for review 
of such order in— 
‘‘(A) the United States Court of Appeals 
for the District of Columbia Circuit; or 
‘‘(B) the United States Court of Appeals 
for the circuit in which any party subject to 
such final order is incorporated on the date that 
the petition for review is filed. 
‘‘(2) TREATMENT
OF
FINDINGS.—In a pro-
ceeding for judicial review of a final order of the 
Commission, the findings of the Commission as to 
the facts, if supported by evidence, shall be conclu-
sive. 
‘‘(e) CONSTRUCTION.— 
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‘‘(1) ANTITRUST
LAWS
AND
CONSUMER
PRO-
TECTION LAWS.—Nothing in this section shall be 
construed to modify, impair, or supersede the oper-
ation of— 
‘‘(A) the antitrust laws as defined in sub-
section (a) of the first section of the Clayton 
Act (15 U.S.C. 12(a)), or any State law sub-
stantially similar to any of such antitrust laws; 
or 
‘‘(B) section 5 of this Act or any substan-
tially similar State law. 
‘‘(2) CLAIMS
AND
COUNTERCLAIMS.—Nothing 
in this section shall modify, impair, or supersede the 
right of an ANDA filer to assert a claim or counter-
claim against any person under any law referred to 
in paragraph (1). 
‘‘(f) PENALTIES.— 
‘‘(1) FORFEITURE.—Each party that violates 
subsection (a)(2)(A) shall forfeit and pay to the 
United States a civil penalty sufficient to deter such 
violation, but in no event greater than 3 times the 
value received by the party that is reasonably attrib-
utable to such violation. Such penalty shall accrue to 
the United States and may be recovered in a civil 
action brought by the Commission, in its own name 
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by any of its attorneys designated by it for such pur-
pose, in a district court of the United States against 
any party that commits such violation. In such ac-
tions, the United States district courts are empow-
ered to grant mandatory injunctions and such other 
and further equitable relief as the courts determine 
to be appropriate. 
‘‘(2) CEASE AND DESIST.— 
‘‘(A) IN GENERAL.—If the Commission has 
issued a cease and desist order with respect to 
a party in an administrative adjudicative pro-
ceeding under the authority of subsection 
(a)(1), an action brought pursuant to para-
graph (1) may be commenced against such 
party at any time before the expiration of 1 
year after such order becomes final pursuant to 
section 5(g). 
‘‘(B) EXCEPTION.—In an action under 
subparagraph (A), the findings of the Commis-
sion as to the material facts in the administra-
tive adjudicative proceeding with respect to a 
violation described in subsection (a)(2)(A) by a 
party shall be conclusive unless— 
‘‘(i) the terms of such cease and de-
sist order expressly provide that the Com-
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mission’s findings shall not be conclusive; 
or 
‘‘(ii) the order became final by reason 
of section 5(g)(1), in which case such find-
ing shall be conclusive if supported by evi-
dence. 
‘‘(3) CIVIL
PENALTY.—In determining the 
amount of the civil penalty described in this section, 
the court shall take into account— 
‘‘(A) the nature, circumstances, extent, 
and gravity of the violation, including the 
amount of commerce affected; 
‘‘(B) with respect to the violator, in addi-
tion to the value received, the degree of culpa-
bility, any history of violations, the ability to 
pay, and any effect on the ability to continue 
doing business; and 
‘‘(C) other matters that justice requires. 
‘‘(4) REMEDIES IN ADDITION.—Remedies pro-
vided in this subsection are in addition to any other 
remedy provided by Federal or State law. Nothing in 
this paragraph shall be construed to affect any au-
thority of the Commission under any other provision 
of law. 
‘‘(g) DEFINITIONS.—In this section: 
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‘‘(1) AGREEMENT RESOLVING OR SETTLING A 
PATENT INFRINGEMENT CLAIM.—The term ‘agree-
ment resolving or settling a patent infringement 
claim’ includes any agreement that is entered into 
within 30 days before or after the resolution or the 
settlement of a patent infringement claim, or any 
other agreement that can be shown to be contingent 
upon, to provide a contingent condition for, or to be 
otherwise related to the resolution or settlement of 
the claim. 
‘‘(2) ANDA.—The term ‘ANDA’ means an ab-
breviated new drug application filed under section 
505(j) of the Federal Food, Drug, and Cosmetic Act 
(21 U.S.C. 355(j)) or a new drug application filed 
under section 505(b)(2) of the Federal Food, Drug, 
and Cosmetic Act (21 U.S.C. 355(b)(2)). 
‘‘(3) ANDA FILER.—The term ‘ANDA filer’ 
means a party that owns or controls an ANDA filed 
with the Commissioner of Food and Drugs or has 
the exclusive rights under such ANDA to distribute 
the ANDA product. 
‘‘(4) ANDA 
PRODUCT.—The term ‘ANDA 
product’ means the product to be manufactured 
under the ANDA that is the subject of the patent 
infringement claim. 
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‘‘(5) DRUG PRODUCT.—The term ‘drug prod-
uct’ has the meaning given such term in section 
314.3(b) of title 21, Code of Federal Regulations (or 
any successor regulation). 
‘‘(6) NDA.—The term ‘NDA’ means a new 
drug application filed under section 505(b) of the 
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
355(b)). 
‘‘(7) PATENT
INFRINGEMENT
CLAIM.—The 
term ‘patent infringement claim’ means any allega-
tion made to an ANDA filer, whether or not in-
cluded in a complaint filed with a court, that the 
ANDA filer’s ANDA or ANDA product may infringe 
any of the following held by, or exclusively licensed 
to, the NDA holder of the drug product: 
‘‘(A) Any patent. 
‘‘(B) Any filed patent application. 
‘‘(C) Any extension, reissue, renewal, divi-
sion, continuation, continuation in part, or reex-
amination of a patent. 
‘‘(D) Any patent term restoration, patents 
of addition, or extensions thereof. 
‘‘(E) Any other patent interest. 
‘‘(8) STATUTORY
EXCLUSIVITY.—The term 
‘statutory exclusivity’ means those prohibitions on 
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the approval of drug applications under clauses (ii) 
through (iv) of section 505(c)(3)(E) (5- and 3-year 
data exclusivity), section 527 (orphan drug exclu-
sivity), section 505A (pediatric exclusivity), or sec-
tion 505E (qualified infectious disease product ex-
clusivity) of the Federal Food, Drug, and Cosmetic 
Act (21 U.S.C. 355(c)(3)(E), 360cc, 355a, 355f).’’. 
(b) APPLICABILITY.—Section 27 of the Federal 
Trade Commission Act, as added by this section, shall 
apply to any agreement described in section 27(a)(2)(A) 
of that Act entered into after June 17, 2013. Section 27(f) 
of the Federal Trade Commission Act, as added by this 
section, shall apply to agreements entered into on or after 
the date of enactment of this Act. 
SEC. 5. NOTICE AND CERTIFICATION OF AGREEMENTS. 
(a) 
NOTICE
OF
ALL
AGREEMENTS.—Section 
1112(c)(2) of the Medicare Prescription Drug, Improve-
ment, and Modernization Act of 2003 (21 U.S.C. 355 
note) is amended by— 
(1) striking ‘‘the Commission the’’ and insert-
ing the following: ‘‘the Commission— 
‘‘(A) the’’; 
(2) striking the period and inserting ‘‘; and’’; 
and 
(3) inserting at the end the following: 
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‘‘(B) any other agreement the parties enter 
into within 30 days after entering into an 
agreement covered by subsection (a) or (b).’’. 
(b) CERTIFICATION OF AGREEMENTS.—Section 1112 
of such Act is amended by adding at the end the following: 
‘‘(d) CERTIFICATION.—The Chief Executive Officer 
or the company official with primary responsibility for ne-
gotiating any agreement under subsection (a) or (b) that 
is required to be filed under subsection (c) shall execute 
and file with the Assistant Attorney General and the Com-
mission a certification as follows: ‘I declare that the fol-
lowing is true, correct, and complete to the best of my 
knowledge: The materials filed with the Federal Trade 
Commission and the Department of Justice under section 
1112 of subtitle B of title XI of the Medicare Prescription 
Drug, Improvement, and Modernization Act of 2003, with 
respect to the agreement referenced in this certification— 
‘‘ ‘(1) represent the complete, final, and exclu-
sive agreement between the parties; 
‘‘ ‘(2) include any ancillary agreements that are 
contingent upon, provide a contingent condition for, 
or are otherwise related to, the referenced agree-
ment; and 
‘‘ ‘(3) include written descriptions of any oral 
agreements, representations, commitments, or prom-
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ises between the parties that are responsive to sub-
section (a) or (b) of such section 1112 and have not 
been reduced to writing.’.’’. 
SEC. 6. COMMISSION LITIGATION AUTHORITY. 
Section 16(a)(2) of the Federal Trade Commission 
Act (15 U.S.C. 56(a)(2)) is amended— 
(1) in subparagraph (D), by striking ‘‘or’’ after 
the semicolon; 
(2) in subparagraph (E), by inserting ‘‘or’’ 
after the semicolon; and 
(3) by inserting after subparagraph (E) the fol-
lowing new subparagraph: 
‘‘(F) under section 27;’’. 
SEC. 7. STATUTE OF LIMITATIONS. 
The Federal Trade Commission shall commence any 
enforcement proceeding described in section 27 of the 
Federal Trade Commission Act, as added by section 3, ex-
cept for an action described in section 27(f)(2) of such 
Act, not later than 6 years after the date on which the 
parties to the agreement file the other agreements under 
section 1112(c)(2) or the certification required by section 
1112(d) of the Medicare Prescription Drug Improvement 
and Modernization Act of 2003 (21 U.S.C. 355 note). 
Æ 
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