I 
110TH CONGRESS 
1ST SESSION H. R. 1432 
To prohibit brand name drug companies from compensating generic drug 
companies to delay the entry of a generic drug into the market. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 9, 2007 
Mr. WAXMAN introduced the following bill; which was referred to the Com-
mittee on Energy and Commerce, and in addition to the Committee on 
the Judiciary, for a period to be subsequently determined by the Speaker, 
in each case for consideration of such provisions as fall within the juris-
diction 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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Preserve Access to Af-
fordable Generics Act’’. 
SEC. 2. CONGRESSIONAL FINDINGS AND DECLARATION OF 
PURPOSES. 
(a) FINDINGS.—The Congress finds that— 
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(1) prescription drugs make up 11 percent of 
the national health care spending but are 1 of the 
largest and fastest growing health care expenditures; 
(2) 56 percent of all prescriptions dispensed in 
the United States are generic drugs, yet they ac-
count for only 13 percent of all expenditures; 
(3) generic drugs, on average, cost 63 percent 
less than their brand-name counterparts; 
(4) consumers and the health care system 
would benefit from free and open competition in the 
pharmaceutical market and the removal of obstacles 
to the introduction of generic drugs; 
(5) full and free competition in the pharma-
ceutical industry, and the full enforcement of anti-
trust law to prevent anticompetitive practices in this 
industry, will lead to lower prices, greater innova-
tion, and inure to the general benefit of consumers; 
(6) the Federal Trade Commission has deter-
mined that some brand name pharmaceutical manu-
facturers collude with generic drug manufacturers to 
delay the marketing of competing, low-cost, generic 
drugs; 
(7) collusion by the brand name pharmaceutical 
manufacturers is contrary to free competition, to the 
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interests of consumers, and to the principles under-
lying antitrust law; 
(8) in 2005, 2 appellate court decisions reversed 
the Federal Trade Commission’s long-standing posi-
tion, and upheld settlements that include pay-offs by 
brand name pharmaceutical manufacturers to ge-
neric manufacturers designed to keep generic com-
petition off the market; 
(9) in the 6 months following the March 2005 
court decisions, the Federal Trade Commission 
found there were three settlement agreements in 
which the generic received compensation and agreed 
to a restriction on its ability to market the product; 
(10) the Federal Trade Commission found that 
more than 2⁄3 of the approximately ten settlement 
agreements made in 2006 include a pay-off from the 
brand in exchange for a promise by the generic com-
pany to delay entry into the market; and 
(11) settlements which include a payment from 
a brand name manufacturer to a generic manufac-
turer to delay entry by generic drugs are anti-com-
petitive and contrary to the interests of consumers. 
(b) PURPOSES.—The purposes of this Act are— 
(1) to enhance competition in the pharma-
ceutical market by prohibiting anticompetitive agree-
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ments and collusion between brand name and ge-
neric drug manufacturers intended to keep generic 
drugs off the market; 
(2) to support the purpose and intent of anti-
trust law by prohibiting anticompetitive agreements 
and collusion in the pharmaceutical industry; and 
(3) to clarify the law to prohibit payments from 
brand name to generic drug manufacturers with the 
purpose to prevent or delay the entry of competition 
from generic drugs. 
SEC. 3. UNLAWFUL COMPENSATION FOR DELAY. 
The Clayton Act (15 U.S.C. 12 et seq.) is amended— 
(1) by redesignating section 28 as section 29; 
and 
(2) by inserting after section 27 the following: 
‘‘SEC. 28. UNLAWFUL INTERFERENCE WITH GENERIC MAR-
KETING. 
‘‘(a) It shall be unlawful under this Act for any per-
son, in connection with the sale of a drug product, to di-
rectly or indirectly be a party to any agreement resolving 
or settling a patent infringement claim which— 
‘‘(1) an ANDA filer receives anything of value; 
and 
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‘‘(2) the ANDA filer agrees not to research, de-
velop, manufacture, market, or sell the ANDA prod-
uct for any period of time. 
‘‘(b) Nothing in this section shall prohibit a resolu-
tion or settlement of patent infringement claim in which 
the value paid by the NDA holder to the ANDA filer as 
a part of the resolution or settlement of the patent in-
fringement claim includes no more than the right to mar-
ket the ANDA product prior to the expiration of the pat-
ent that is the basis for the patent infringement claim. 
‘‘(c) In this section: 
‘‘(1) The term ‘agreement’ means anything that 
would constitute an agreement under section 1 of 
the Sherman Act (15 U.S.C. 1) or section 5 of the 
Federal Trade Commission Act (15 U.S.C. 45). 
‘‘(2) The term ‘agreement resolving or settling 
a patent infringement claim’ includes, any agree-
ment that is contingent upon, provides a contingent 
condition for, or is otherwise related to the resolu-
tion or settlement of the claim. 
‘‘(3) The term ‘ANDA’ means an abbreviated 
new drug application, as defined under section 
505(j) of the Federal Food, Drug, and Cosmetic Act 
(21 U.S.C. 355(j)). 
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‘‘(4) The term ‘ANDA filer’ means a party who 
has filed an ANDA with the Federal Drug Adminis-
tration. 
‘‘(5) The term ‘ANDA product’ means the 
product to be manufactured under the ANDA that 
is the subject of the patent infringement claim. 
‘‘(6) The term ‘drug product’ means a finished 
dosage form (e.g., tablet, capsule, or solution) that 
contains a drug substance, generally, but not nec-
essarily, in association with 1 or more other ingredi-
ents, as defined in section 314.3(b) of title 21, Code 
of Federal Regulations. 
‘‘(7) The term ‘NDA’ means a new drug appli-
cation, as defined under section 505(b) of the Fed-
eral Food, Drug, and Cosmetic Act (21 U.S.C. 
355(b)). 
‘‘(8) The term ‘NDA holder’ means— 
‘‘(A) the party that received FDA approval 
to market a drug product pursuant to an NDA; 
‘‘(B) a party owning or controlling enforce-
ment of the patent listed in the Approved Drug 
Products With Therapeutic Equivalence Eval-
uations (commonly known as the ‘FDA Orange 
Book’) in connection with the NDA; or 
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‘‘(C) the predecessors, subsidiaries, divi-
sions, groups, and affiliates controlled by, con-
trolling, or under common control with any of 
the entities described in subclauses (i) and (ii) 
(such control to be presumed by direct or indi-
rect share ownership of 50 percent or greater), 
as well as the licensees, licensors, successors, 
and assigns of each of the entities. 
‘‘(9) The term ‘patent infringement’ means in-
fringement of any patent or of any filed patent ap-
plication, extension, reissue, renewal, division, con-
tinuation, continuation in part, reexamination, pat-
ent term restoration, patents of addition and exten-
sions thereof. 
‘‘(10) The term ‘patent infringement claim’ 
means any allegation made to an ANDA filer, 
whether or not included in a complaint filed with a 
court of law, that its ANDA or ANDA product may 
infringe any patent held by, or exclusively licensed 
to, the NDA holder of the drug product.’’. 
SEC. 4. 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. 3155 
note) is amended by— 
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(1) striking ‘‘the Commission the’’ and insert-
ing ‘‘the Commission (1) the’’; and 
(2) inserting before the period at the end the 
following: ‘‘; and (2) a description of the subject 
matter of any other agreement the parties enter into 
within 30 days of an 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 responsible for negotiating any 
agreement required to be filed under subsection (a), (b), 
or (c) shall execute and file with the Assistant Attorney 
General and the Commission a certification as follows: ‘I 
declare under penalty of perjury that the following is true 
and correct: 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 exclusive 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 agreement; 
and (3) include written descriptions of any oral agree-
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ments, representations, commitments, or promises be-
tween the parties that are responsive to subsection (a) or 
(b) of such section 1112 and have not been reduced to 
writing.’.’’. 
SEC. 5. FORFEITURE OF 180-DAY EXCLUSIVITY PERIOD. 
Section 505(j)(5)(D)(i)(V) of the Federal Food, Drug 
and Cosmetic Act (21 U.S.C. 355(j)(5)(D)(i)(V)) is 
amended by inserting ‘‘section 28 of the Clayton Act or’’ 
after ‘‘that the agreement has violated’’. 
SEC. 6. AUTHORIZATION OF APPROPRIATIONS. 
There are authorized to be appropriated to the Fed-
eral Trade Commission such sums as may be necessary 
to carry out the provisions of this Act. 
Æ 
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