Title: Affordable Prescriptions for Patients Through Promoting Competition Act of 2019
Policy area: Commerce

Summary:
Affordable Prescriptions for Patients Through Promoting Competition Act of 2019  This bill prohibits product hopping by drug manufacturers. Product hopping is presumed when a drug manufacturer engages is a hard switch or a soft switch. A hard switch occurs when, after a manufacturer receives notice of an application for a generic drugs, either, (1) the manufacturer obtains removal of a drug from the Food and Drug Administration’s approved drug list or the drug is moved to the discontinued products list, and the manufacturer markets or sells a follow-on product; or (2) a manufacturer announces the withdrawal or discontinuance of a listed drug, or the manufacturer destroys the inventory of a listed drug in a manner that impedes generic drug competitors, and the manufacturer markets or sells a follow-on product. A follow-on product is a changed, modified, or reformulated version of a manufacturer’s already-approved drug or biological product that still treats the same medical condition.  A soft switch occurs when a manufacturer receives notice of an application for a generic drugs, takes other actions that impede generic drug competitors, and the manufacturer markets or sells a follow-on product.  A drug manufacturer may rebut a presumption of product hopping by demonstrating that its conduct was not intended to limit competition.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4398 Introduced in House (IH)]

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116th CONGRESS
  1st Session
                                H. R. 4398

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


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 19, 2019

Mr. Cicilline introduced the following bill; which was 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 Through Promoting Competition 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(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 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)(I) The manufacturer of the listed 
                        drug or reference product--
                                    ``(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 
                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.
                    ``(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).
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