119-s1096

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 1096 Reported in Senate

    (RS) ]

<DOC>

 Calendar No. 46
119th CONGRESS
 1st Session
 S. 1096

 To prohibit brand name drug companies from compensating generic drug 
companies to delay the entry of a generic drug into the market, and to 
prohibit biological product manufacturers from compensating biosimilar 
 and interchangeable companies to delay the entry of biosimilar 
 biological products and interchangeable biological products.

_______________________________________________________________________

 IN THE SENATE OF THE UNITED STATES

 March 24, 2025

 Ms. Klobuchar (for herself, Mr. Grassley, Mr. Durbin, Mr. Cramer, Mr. 
Blumenthal, Ms. Ernst, Mr. Welch, Mr. Kelly, and Mr. Booker) introduced 
the following bill; which was read twice and referred to the Committee 
 on the Judiciary

 April 10, 2025

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

_______________________________________________________________________

 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 to 
prohibit biological product manufacturers from compensating biosimilar 
 and interchangeable companies to delay the entry of biosimilar 
 biological products and interchangeable biological products.

 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 ``Preserve Access to 
Affordable Generics and Biosimilars Act''.</DELETED>

<DELETED>

SEC. 2. CONGRESSIONAL FINDINGS AND DECLARATION OF 
 PURPOSES.</DELETED>

<DELETED>

    (a) 

=== Findings ===
-Congress finds the following:</DELETED>
 <DELETED>

    (1) In 1984, the Drug Price Competition and Patent 
 Term Restoration Act (Public Law 98-417) (referred to in this 
 Act as the ``1984 Act''), was enacted with the intent of 
 facilitating the early entry of generic drugs while preserving 
 incentives for innovation.</DELETED>
 <DELETED>

    (2) Prescription drugs make up approximately 11 
 percent of the national health care spending.</DELETED>
 <DELETED>

    (3) Initially, the 1984 Act was successful in 
 facilitating generic competition to the benefit of consumers 
 and health care payers. Although 91 percent of all 
 prescriptions dispensed in the United States are generic drugs, 
 they account for only 18 percent of all expenditures.</DELETED>
 <DELETED>

    (4) Generic drugs cost substantially less than 
 brand name drugs, with discounts off the brand price averaging 
 80 to 85 percent.</DELETED>
 <DELETED>

    (5) Federal dollars currently account for over 40 
 percent of the $449,700,000,000 spent on retail prescription 
 drugs annually.</DELETED>
 <DELETED>

    (6)
        (A) In recent years, the intent of the 1984 Act 
 has been subverted by certain settlement agreements in which 
 brand name companies transfer value to their potential generic 
 competitors to settle claims that the generic company is 
 infringing the branded company's patents.</DELETED>
 <DELETED>
        (B) These ``reverse payment'' settlement 
 agreements--</DELETED>
 <DELETED>
            (i) allow a branded company to share its 
 monopoly profits with the generic company as a way to 
 protect the branded company's monopoly; and</DELETED>
 <DELETED>
            (ii) have unduly delayed the marketing of 
 low-cost generic drugs contrary to free competition, 
 the interests of consumers, and the principles 
 underlying antitrust law.</DELETED>
 <DELETED>
            (C) Because of the price disparity between brand 
 name and generic drugs, such agreements are more profitable for 
 both the brand and generic manufacturers than competition and 
 will become increasingly common unless prohibited.</DELETED>
 <DELETED>
            (D) These agreements result in consumers losing 
 the benefits that the 1984 Act was intended to 
 provide.</DELETED>
 <DELETED>

    (7) In 2010, the Biologics Price Competition and 
 Innovation Act (Public Law 111-148) (referred to in this Act as 
 the ``BPCIA''), was enacted with the intent of facilitating the 
 early entry of biosimilar and interchangeable follow-on 
 versions of branded biological products while preserving 
 incentives for innovation.</DELETED>
 <DELETED>

    (8) Biological drugs play an important role in 
 treating many serious illnesses, from cancers to genetic 
 disorders. They are also expensive, representing more than half 
 of all prescription drug spending.</DELETED>
 <DELETED>

    (9) Competition from biosimilar and 
 interchangeable biological products promises to lower drug 
 costs and increase patient access to biological medicines. But 
 ``reverse payment'' settlement agreements also threaten to 
 delay the entry of biosimilar and interchangeable biological 
 products, which would undermine the goals of BPCIA.</DELETED>
<DELETED>

    (b) 

=== Purposes ===
-The purposes of this Act are--</DELETED>
 <DELETED>

    (1) to enhance competition in the pharmaceutical 
 market by stopping anticompetitive agreements between brand 
 name and generic drug and biosimilar biological product 
 manufacturers that limit, delay, or otherwise prevent 
 competition from generic drugs and biosimilar biological 
 products; and</DELETED>
 <DELETED>

    (2) to support the purpose and intent of antitrust 
 law by prohibiting anticompetitive practices in the 
 pharmaceutical industry that harm consumers.</DELETED>

<DELETED>

SEC. 3. UNLAWFUL COMPENSATION FOR DELAY.</DELETED>

<DELETED>

    (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:</DELETED>

<DELETED>``

SEC. 27. PRESERVING ACCESS TO AFFORDABLE GENERICS AND 
 BIOSIMILARS.</DELETED>

<DELETED> ``

    (a) Prohibition.--</DELETED>
 <DELETED> ``

    (1) In general.--It shall be a violation of this 
 section for a party to enter into, or be a participant to, an 
 agreement, resolving or settling, on a final or interim basis, 
 a patent claim in connection with the sale of a drug product or 
 biological product, that has anticompetitive effects.</DELETED>
 <DELETED> ``

    (2) Treatment.--A violation of this section 
 shall be treated as an unfair method of competition in 
 violation of 

section 5

    (a)

    (1) .</DELETED>
 <DELETED> ``

    (3) Presumption.--</DELETED>
 <DELETED> ``
        (A) In general.--Subject to subparagraph
        (B) , an agreement described in paragraph

    (1) shall be 
 presumed to have anticompetitive effects for purposes 
 of such paragraph if--</DELETED>
 <DELETED> ``
            (i) an ANDA filer or a 
 biosimilar biological product application filer 
 receives anything of value, including an 
 exclusive license; and</DELETED>
 <DELETED> ``
            (ii) the ANDA filer or 
 biosimilar biological product application filer 
 agrees to limit or forgo research, development, 
 manufacturing, marketing, or sales of the ANDA 
 product or biosimilar biological product, as 
 applicable, for any period of time.</DELETED>
 <DELETED> ``
        (B) Exception.--Subparagraph
        (A) shall 
 not apply if the parties to such agreement demonstrate 
 by a preponderance of the evidence that--</DELETED>
 <DELETED> ``
            (i) the value described in 
 subparagraph
        (A)
            (i) is compensation solely for 
 other goods or services that the ANDA filer or 
 biosimilar biological product application filer 
 has promised to provide; or</DELETED>
 <DELETED> ``
            (ii) the procompetitive benefits 
 of the transfer of value described in 
 subparagraph
        (A)
            (i) and the agreement by the 
 ANDA filer or biosimilar biological product 
 application filer to limit or forgo research, 
 development, manufacturing, marketing, or sales 
 of the ANDA product or biosimilar biological 
 product described in subparagraph
        (A)
            (ii) outweigh the anticompetitive effects of the 
 transfer of value described in subparagraph
        (A)
            (i) and the agreement by the ANDA filer or 
 biosimilar biological product application filer 
 to limit or forgo research, development, 
 manufacturing, marketing, or sales of the ANDA 
 product or biosimilar biological product 
 described in subparagraph
        (A)
            (ii) .</DELETED>
 <DELETED> ``

    (4) Civil action.--In addition to any proceeding 
 under 

section 5, if the Commission has reason to believe that a 
 party has violated this section, the Commission may bring, in 
 its own name by any of its attorneys designated by it for such 
 purpose, a civil action against the party in a district court 
 of the United States to seek to recover any of the remedies of 
 civil penalty, mandatory injunctions, and such other and 
 further equitable relief as the court deems 
 appropriate.</DELETED>
 <DELETED> ``

    (5) Civil penalty.--</DELETED>
 <DELETED> ``
        (A) In general.--Each party that 
 violates or assists in the violation of paragraph

    (1) shall forfeit and pay to the United States a civil 
 penalty sufficient to deter violations of paragraph

    (1) , but in no event greater than 3 times the value 
 received by the party that is reasonably attributable 
 to the violation of paragraph

    (1) . If no such value has 
 been received by the NDA holder, the biological product 
 license holder, the ANDA filer, or the biosimilar 
 biological product application filer, the penalty to 
 the NDA holder, the biological product license holder, 
 the ANDA filer, or the biosimilar biological product 
 application filer shall be sufficient to deter 
 violations, but in no event shall be greater than 3 
 times the value given to an ANDA filer or biosimilar 
 biological product application filer reasonably 
 attributable to the violation of this 
 section.</DELETED>
 <DELETED> ``
        (B) Amount.--In determining the amount 
 of the civil penalty described in subparagraph
        (A) , the 
 court shall take into account--</DELETED>
 <DELETED> ``
            (i) the nature, circumstances, 
 extent, and gravity of the violation;</DELETED>
 <DELETED> ``
            (ii) with respect to the 
 violator, the degree of culpability, any 
 history of prior such conduct, including other 
 agreements resolving or settling a patent 
 infringement claim, the ability to pay, any 
 effect on the ability to continue doing 
 business, profits earned by the NDA holder, the 
 biological product license holder, the ANDA 
 filer, or the biosimilar biological product 
 application filer, compensation received by the 
 ANDA filer or biosimilar biological product 
 application filer, and the amount of commerce 
 affected; and</DELETED>
 <DELETED> ``
            (iii) other matters that justice 
 requires.</DELETED>
 <DELETED> ``
            (C) Remedies in addition.--Remedies 
 provided in this paragraph are in addition to, and not 
 in lieu of, any other remedy provided by Federal law. 
 Nothing in this section shall be construed to limit any 
 authority of the Commission under any other provision 
 of law.</DELETED>
<DELETED> ``

    (b) Exclusions.--Nothing in this section shall prohibit 
a resolution or settlement of a patent infringement claim in which the 
consideration that the ANDA filer or biosimilar biological product 
application filer, respectively, receives as part of the resolution or 
settlement includes only one or more of the following:</DELETED>
 <DELETED> ``

    (1) The right to market and secure final 
 approval in the United States for the ANDA product or 
 biosimilar biological product at a date, whether certain or 
 contingent, prior to the expiration of--</DELETED>
 <DELETED> ``
        (A) any patent that is the basis for the 
 patent infringement claim; or</DELETED>
 <DELETED> ``
        (B) any patent right or other statutory 
 exclusivity that would prevent the marketing of such 
 ANDA product or biosimilar biological 
 product.</DELETED>
 <DELETED> ``

    (2) A payment for reasonable litigation expenses 
 not to exceed--</DELETED>
 <DELETED> ``
        (A) for calendar year 2025, $7,500,000; 
 or</DELETED>
 <DELETED> ``
        (B) for calendar year 2026 and each 
 subsequent calendar year, the amount determined for the 
 preceding calendar year adjusted to reflect the 
 percentage increase (if any) in the Producer Price 
 Index for Legal Services published by the Bureau of 
 Labor Statistics of the Department of Labor for the 
 most recent calendar year.</DELETED>
 <DELETED> ``

    (3) A covenant not to sue on any claim that the 
 ANDA product or biosimilar biological product infringes a 
 United States patent.</DELETED>
<DELETED> ``
            (c) Antitrust Laws.--Except to the extent this section 
establishes an additional basis of liability, nothing in 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 this Act to the 
extent that 

section 5 applies to unfair methods of competition. Nothing 
in this section shall modify, impair, limit, or supersede the right of 
an ANDA filer or biosimilar biological product application filer to 
assert claims or counterclaims against any person, under the antitrust 
laws or other laws relating to unfair competition.</DELETED>
<DELETED> ``
            (d) === Definitions. ===
-In this section:</DELETED>
 <DELETED> ``

    (1) Agreement.--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 this 
 Act.</DELETED>
 <DELETED> ``

    (2) Agreement resolving or settling a patent 
 infringement claim.--The term `agreement resolving or settling 
 a patent infringement claim' includes any agreement that is 
 entered into within 30 days of the resolution or the settlement 
 of the claim, or any other agreement that is contingent upon, 
 provides a contingent condition for, or is otherwise related to 
 the resolution or settlement of the claim.</DELETED>
 <DELETED> ``

    (3) ANDA.--The term `ANDA' means an abbreviated 
 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 submitted pursuant to 

section 505

    (b)

    (2) of the 
 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
 355

    (b)

    (2) ).</DELETED>
 <DELETED> ``

    (4) ANDA filer.--The term `ANDA filer' means a 
 party that owns or controls an ANDA filed with the Secretary of 
 Health and Human Services or has the exclusive rights under 
 such ANDA to distribute the ANDA product.</DELETED>
 <DELETED> ``

    (5) ANDA product.--The term `ANDA product' means 
 the product to be manufactured under the ANDA that is the 
 subject of the patent infringement claim.</DELETED>
 <DELETED> ``

    (6) Biological product.--The term `biological 
 product' has the meaning given such term in 

section 351
            (i) (1) of the Public Health Service Act (42 U.S.C. 
 262
            (i) (1) ).</DELETED>
 <DELETED> ``

    (7) Biological product license application.--The 
 term `biological product license application' means an 
 application under 

section 351

    (a) of the Public Health Service 
 Act (42 U.S.C. 262

    (a) ).</DELETED>
 <DELETED> ``

    (8) Biological product license holder.--The term 
 `biological product license holder' means--</DELETED>
 <DELETED> ``
        (A) the holder of an approved biological 
 product license application for a biological 
 product;</DELETED>
 <DELETED> ``
        (B) a person owning or controlling 
 enforcement of any patents that claim the biological 
 product that is the subject of such approved 
 application; or</DELETED>
 <DELETED> ``
            (C) the predecessors, subsidiaries, 
 divisions, groups, and affiliates controlled by, 
 controlling, or under common control with any of the 
 entities described in subparagraphs
        (A) and
        (B) (such 
 control to be presumed by direct or indirect share 
 ownership of 50 percent or greater), as well as the 
 licensees, licensors, successors, and assigns of each 
 of the entities.</DELETED>
 <DELETED> ``

    (9) Biosimilar biological product.--The term 
 `biosimilar biological product' means the product to be 
 manufactured under the biosimilar biological product 
 application that is the subject of the patent infringement 
 claim.</DELETED>
 <DELETED> ``

    (10) Biosimilar biological product 
 application.--The term `biosimilar biological product 
 application' means an application under 

section 351

    (k) of the 
 Public Health Service Act (42 U.S.C. 262

    (k) ) for licensure of a 
 biological product as biosimilar to, or interchangeable with, a 
 reference product.</DELETED>
 <DELETED> ``

    (11) Biosimilar biological product application 
 filer.--The term `biosimilar biological product application 
 filer' means a party that owns or controls a biosimilar 
 biological product application filed with the Secretary of 
 Health and Human Services or has the exclusive rights under 
 such application to distribute the biosimilar biological 
 product.</DELETED>
 <DELETED> ``

    (12) Drug product.--The term `drug product' has 
 the meaning given such term in 

section 314.3

    (b) of title 21, 
 Code of Federal Regulations (or any successor 
 regulation).</DELETED>
 <DELETED> ``

    (13) Market.--The term `market' means the 
 promotion, offering for sale, selling, or distribution of a 
 drug product.</DELETED>
 <DELETED> ``

    (14) 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) ).</DELETED>
 <DELETED> ``

    (15) NDA holder.--The term `NDA holder' means--
 </DELETED>
 <DELETED> ``
        (A) the holder of an approved NDA 
 application for a drug product;</DELETED>
 <DELETED> ``
        (B) a person owning or controlling 
 enforcement of the patent listed in the Approved Drug 
 Products With Therapeutic Equivalence Evaluations 
 (commonly known as the `FDA Orange Book') in connection 
 with the NDA; or</DELETED>
 <DELETED> ``
            (C) the predecessors, subsidiaries, 
 divisions, groups, and affiliates controlled by, 
 controlling, or under common control with any of the 
 entities described in subparagraphs
        (A) and
        (B) (such 
 control to be presumed by direct or indirect share 
 ownership of 50 percent or greater), as well as the 
 licensees, licensors, successors, and assigns of each 
 of the entities.</DELETED>
 <DELETED> ``

    (16) Party.--The term `party' means any person, 
 partnership, corporation, or other legal entity.</DELETED>
 <DELETED> ``

    (17) Patent infringement.--The term `patent 
 infringement' means infringement of any patent or of any filed 
 patent application, including any extension, reissue, renewal, 
 division, continuation, continuation in part, reexamination, 
 patent term restoration, patents of addition, and extensions 
 thereof.</DELETED>
 <DELETED> ``

    (18) Patent infringement claim.--The term 
 `patent infringement claim' means any allegation made to an 
 ANDA filer or biosimilar biological product application filer, 
 whether or not included in a complaint filed with a court of 
 law, that its ANDA or ANDA product, or biosimilar biological 
 product application or biosimilar biological product, may 
 infringe any patent held by, or exclusively licensed to, the 
 NDA holder or biological product license holder of the drug 
 product or biological product, as applicable.</DELETED>
 <DELETED> ``

    (19) Statutory exclusivity.--The term `statutory 
 exclusivity' means those prohibitions on the submission or the 
 approval of drug applications under clauses
            (ii) through
            (iv) of 

section 505
            (c) (3)
        (E) , clauses
            (ii) through
            (iv) of 

section 505

    (j)

    (5)
        (F) , 

section 527, 

section 505A, or 

section 505E of the 
 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355
            (c) (3)
        (E) , 
 360cc, 355a, 355f), or on the submission or licensing of 
 biological product applications under 

section 351

    (k)

    (7) or 
 paragraph

    (2) or

    (3) of 

section 351
            (m) of the Public Health 
 Service Act (42 U.S.C. 262) or under 

section 527 of the Federal 
 Food, Drug, and Cosmetic Act (21 U.S.C. 360cc).''.</DELETED>
<DELETED>

    (b) Effective Date.--

Section 27 of the Federal Trade 
Commission Act, as added by this section, shall apply to all agreements 
described in 

section 27

    (a)

    (1) of that Act entered into on or after the 
date of enactment of this Act.</DELETED>

<DELETED>

SEC. 4. CERTIFICATION OF AGREEMENTS.</DELETED>

<DELETED>

    (a) Notice of All Agreements.--

Section 1111

    (7) of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(21 U.S.C. 355 note) is amended by inserting ``, or the owner of a 
patent for which a claim of infringement could reasonably be asserted 
against any person for making, using, offering to sell, selling, or 
importing into the United States a biological product that is the 
subject of a biosimilar biological product application'' before the 
period at the end.</DELETED>
<DELETED>

    (b) Certification of Agreements.--

Section 1112 of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(21 U.S.C. 355 note) is amended by adding at the end the 
following:</DELETED>
<DELETED> ``
            (d) Certification.--The Chief Executive Officer or the 
company official responsible for negotiating any agreement under 
subsection

    (a) or

    (b) that is required to be filed under subsection
            (c) , within 30 days after such filing, shall execute and file with the 
Assistant Attorney General and the Commission a certification as 
follows: `I declare that the following 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--</DELETED>
 <DELETED> ``

    (1) represent the complete, final, and exclusive 
 agreement between the parties;</DELETED>
 <DELETED> ``

    (2) include any ancillary agreements that are 
 contingent upon, provide a contingent condition for, or are 
 otherwise related to, the referenced agreement; and</DELETED>
 <DELETED> ``

    (3) include written descriptions of any oral 
 agreements, representations, commitments, or promises between 
 the parties that are responsive to subsection

    (a) or

    (b) of 
 such 

section 1112 and have not been reduced to 
 writing.'''.</DELETED>

<DELETED>

SEC. 5. NOTIFICATION OF AGREEMENTS.</DELETED>

<DELETED> 

Section 1112 of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003 (21 U.S.C. 355 note), as 
amended by 

section 4

    (b) , is further amended by adding at the end the 
following:</DELETED>
<DELETED> ``

    (e) Rule of Construction.--</DELETED>
 <DELETED> ``

    (1) In general.--An agreement that is required 
 under subsection

    (a) or

    (b) shall include agreements resolving 
 any outstanding disputes, including agreements resolving or 
 settling a Patent Trial and Appeal Board proceeding.</DELETED>
 <DELETED> ``

    (2) === Definition. ===
-For purposes of subparagraph
        (A) , the term `Patent Trial and Appeal Board proceeding' means 
 a proceeding conducted by the Patent Trial and Appeal Board of 
 the United States Patent and Trademark Office, including an 
 inter partes review instituted under chapter 31 of title 35, 
 United States Code, a post-grant review instituted under 
 chapter 32 of that title (including a proceeding instituted 
 pursuant to the transitional program for covered business 
 method patents, as described in 

section 18 of the Leahy-Smith 
 America Invents Act (35 U.S.C. 321 note)), and a derivation 
 proceeding instituted under 

section 135 of that 
 title.''.</DELETED>

<DELETED>

SEC. 6. FORFEITURE OF 180-DAY EXCLUSIVITY PERIOD.</DELETED>

<DELETED> 

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 27 of the Federal Trade Commission Act or'' after ``that the 
agreement has violated''.</DELETED>

<DELETED>

SEC. 7. COMMISSION LITIGATION AUTHORITY.</DELETED>

<DELETED> 

Section 16

    (a)

    (2) of the Federal Trade Commission Act (15 
U.S.C. 56

    (a)

    (2) ) is amended--</DELETED>
 <DELETED>

    (1) in subparagraph
            (D) , by striking ``or'' after 
 the semicolon;</DELETED>
 <DELETED>

    (2) in subparagraph
        (E) --</DELETED>
 <DELETED>
        (A) by moving the margin 2 ems to the 
 left; and</DELETED>
 <DELETED>
        (B) by inserting ``or'' after the 
 semicolon; and</DELETED>
 <DELETED>

    (3) inserting after subparagraph
        (E) the 
 following:</DELETED>
 <DELETED> ``
        (F) under 

section 27,''.</DELETED>

<DELETED>

SEC. 8. REPORT ON ADDITIONAL EXCLUSION.</DELETED>

 <DELETED>

    (1) In general.--Not later than 1 year after the 
 date of enactment of this Act, the Federal Trade Commission 
 shall submit to the Committee on the Judiciary of the Senate 
 and the Committee on the Judiciary of the House of 
 Representatives a recommendation, and the Commission's basis 
 for such recommendation, regarding a potential amendment to 
 include in 

section 27

    (b) of the Federal Trade Commission Act 
 (as added by 

section 3) an additional exclusion for 
 consideration granted by an NDA holder to a ANDA filer or by a 
 biological product license holder to a biosimilar biological 
 product application filer as part of the resolution or 
 settlement, a release, waiver, or limitation of a claim for 
 damages or other monetary relief.</DELETED>
 <DELETED>

    (2) === Definitions. ===
-In this section, the terms 
 ``ANDA filer'', ``biological product license holder'', 
 ``biosimilar biological product application filer'', and ``NDA 
 holder'' have the meanings given such terms in 

section 27
            (d) of 
 the Federal Trade Commission Act (as added by 

section 3).</DELETED>

<DELETED>

SEC. 9. STATUTE OF LIMITATIONS.</DELETED>

<DELETED> The Federal Trade Commission shall commence any 
enforcement proceeding described in 

section 27 of the Federal Trade 
Commission Act, as added by 

section 3, not later than 6 years after the 
date on which the parties to the agreement file the certification under 

section 1112
            (d) of the Medicare Prescription Drug Improvement and 
Modernization Act of 2003 (21 U.S.C. 355 note).</DELETED>

<DELETED>

SEC. 10. SEVERABILITY.</DELETED>

<DELETED> If any provision of this Act, an amendment made by this 
Act, or the application of such provision or amendment to any person or 
circumstance is held to be unconstitutional, the remainder of this Act, 
the amendments made by this Act, and the application of the provisions 
of such Act or amendments to any person or circumstance shall not be 
affected.</DELETED>

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``Preserve Access to Affordable 
Generics and Biosimilars Act''.

SEC. 2. CONGRESSIONAL FINDINGS AND DECLARATION OF PURPOSES.

    (a) 

=== Findings ===
-Congress finds the following:

    (1) In 1984, the Drug Price Competition and Patent Term 
 Restoration Act of 1984 (Public Law 98-417) (referred to in 
 this Act as the ``1984 Act''), was enacted with the intent of 
 facilitating the early entry of generic drugs while preserving 
 incentives for innovation.

    (2) Prescription drugs make up approximately 11 percent of 
 the national health care spending.

    (3) Initially, the 1984 Act was successful in facilitating 
 generic competition to the benefit of consumers and health care 
 payers. Although 91 percent of all prescriptions dispensed in 
 the United States are generic drugs, they account for only 18 
 percent of all expenditures.

    (4) Generic drugs cost substantially less than brand name 
 drugs, with discounts off the brand price averaging 80 to 85 
 percent.

    (5) Federal dollars currently account for over 40 percent 
 of the $449,700,000,000 spent on retail prescription drugs 
 annually.

    (6)
        (A) In recent years, the intent of the 1984 Act has been 
 subverted by certain settlement agreements in which brand name 
 companies transfer value to their potential generic competitors 
 to settle claims that the generic company is infringing the 
 branded company's patents.
        (B) These ``reverse payment'' settlement agreements--
            (i) allow a branded company to share its monopoly 
 profits with the generic company as a way to protect 
 the branded company's monopoly; and
            (ii) have unduly delayed the marketing of low-cost 
 generic drugs contrary to free competition, the 
 interests of consumers, and the principles underlying 
 antitrust law.
            (C) Because of the price disparity between brand name and 
 generic drugs, such agreements are more profitable for both the 
 brand and generic manufacturers than competition and will 
 become increasingly common unless prohibited.
            (D) These agreements result in consumers losing the 
 benefits that the 1984 Act was intended to provide.

    (7) In 2010, the Biologics Price Competition and Innovation 
 Act of 2009 (Public Law 111-148) (referred to in this Act as 
 the ``BPCIA''), was enacted with the intent of facilitating the 
 early entry of biosimilar and interchangeable follow-on 
 versions of branded biological products while preserving 
 incentives for innovation.

    (8) Biological drugs play an important role in treating 
 many serious illnesses, from cancers to genetic disorders. They 
 are also expensive, representing more than half of all 
 prescription drug spending.

    (9) Competition from biosimilar and interchangeable 
 biological products promises to lower drug costs and increase 
 patient access to biological medicines. But ``reverse payment'' 
 settlement agreements also threaten to delay the entry of 
 biosimilar and interchangeable biological products, which would 
 undermine the goals of the BPCIA.

    (b) 

=== Purposes ===
-The purposes of this Act are--

    (1) to enhance competition in the pharmaceutical market by 
 stopping anticompetitive agreements between brand name and 
 generic drug and biosimilar biological product manufacturers 
 that limit, delay, or otherwise prevent competition from 
 generic drugs and biosimilar biological products; and

    (2) to support the purpose and intent of antitrust law by 
 prohibiting anticompetitive practices in the pharmaceutical 
 industry that harm consumers.

SEC. 3. UNLAWFUL COMPENSATION FOR DELAY.

    (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. PRESERVING ACCESS TO AFFORDABLE GENERICS AND BIOSIMILARS.

 ``

    (a) Prohibition.--
 ``

    (1) In general.--It shall be a violation of this section 
 for a party to enter into, or be a participant to, an 
 agreement, resolving or settling, on a final or interim basis, 
 a patent claim in connection with the sale of a drug product or 
 biological product, that has anticompetitive effects.
 ``

    (2) Treatment.--A violation of this section shall be 
 treated as an unfair method of competition in violation of 
 

section 5

    (a)

    (1) .
 ``

    (3) Presumption.--
 ``
        (A) In general.--Subject to subparagraph
        (B) , an 
 agreement described in paragraph

    (1) shall be presumed 
 to have anticompetitive effects for purposes of such 
 paragraph if--
 ``
            (i) an ANDA filer or a biosimilar 
 biological product application filer receives 
 anything of value, including an exclusive 
 license; and
 ``
            (ii) the ANDA filer or biosimilar 
 biological product application filer agrees to 
 limit or forgo research, development, 
 manufacturing, marketing, or sales of the ANDA 
 product or biosimilar biological product, as 
 applicable, for any period of time.
 ``
        (B) Exception.--Subparagraph
        (A) shall not apply 
 if the parties to such agreement demonstrate by a 
 preponderance of the evidence that--
 ``
            (i) the value described in subparagraph
        (A)
            (i) is compensation solely for other goods 
 or services that the ANDA filer or biosimilar 
 biological product application filer has 
 promised to provide; or
 ``
            (ii) the procompetitive benefits of the 
 transfer of value described in subparagraph
        (A)
            (i) and the agreement by the ANDA filer or 
 biosimilar biological product application filer 
 to limit or forgo research, development, 
 manufacturing, marketing, or sales of the ANDA 
 product or biosimilar biological product 
 described in subparagraph
        (A)
            (ii) outweigh the 
 anticompetitive effects of the transfer of 
 value described in subparagraph
        (A)
            (i) and the 
 agreement by the ANDA filer or biosimilar 
 biological product application filer to limit 
 or forgo research, development, manufacturing, 
 marketing, or sales of the ANDA product or 
 biosimilar biological product described in 
 subparagraph
        (A)
            (ii) .
 ``

    (4) Civil action.--In addition to any proceeding under 
 

section 5, if the Commission has reason to believe that a party 
 has violated this section, the Commission may bring, in its own 
 name by any of its attorneys designated by it for such purpose, 
 a civil action against the party in a district court of the 
 United States to seek to recover any of the remedies of civil 
 penalty, mandatory injunctions, and such other and further 
 equitable relief as the court deems appropriate.
 ``

    (5) Civil penalty.--
 ``
        (A) In general.--Each party that violates or 
 assists in the violation of paragraph

    (1) shall forfeit 
 and pay to the United States a civil penalty sufficient 
 to deter violations of paragraph

    (1) , but in no event 
 greater than 3 times the value received by the party 
 that is reasonably attributable to the violation of 
 paragraph

    (1) . If no such value has been received by 
 the NDA holder, the biological product license holder, 
 the ANDA filer, or the biosimilar biological product 
 application filer, the penalty to the NDA holder, the 
 biological product license holder, the ANDA filer, or 
 the biosimilar biological product application filer 
 shall be sufficient to deter violations, but in no 
 event shall be greater than 3 times the value given to 
 an ANDA filer or biosimilar biological product 
 application filer reasonably attributable to the 
 violation of this section.
 ``
        (B) Amount.--In determining the amount of the 
 civil penalty described in subparagraph
        (A) , the court 
 shall take into account--
 ``
            (i) the nature, circumstances, extent, 
 and gravity of the violation;
 ``
            (ii) with respect to the violator, the 
 degree of culpability, any history of prior 
 such conduct, including other agreements 
 resolving or settling a patent infringement 
 claim, the ability to pay, any effect on the 
 ability to continue doing business, profits 
 earned by the NDA holder, the biological 
 product license holder, the ANDA filer, or the 
 biosimilar biological product application 
 filer, compensation received by the ANDA filer 
 or biosimilar biological product application 
 filer, and the amount of commerce affected; and
 ``
            (iii) other matters that justice 
 requires.
 ``
            (C) Remedies in addition.--Remedies provided in 
 this paragraph are in addition to, and not in lieu of, 
 any other remedy provided by Federal law. Nothing in 
 this section shall be construed to limit any authority 
 of the Commission under any other provision of law.
 ``

    (b) Exclusions.--Nothing in this section shall prohibit a 
resolution or settlement of a patent infringement claim in which the 
consideration that the ANDA filer or biosimilar biological product 
application filer, respectively, receives as part of the resolution or 
settlement includes only one or more of the following:
 ``

    (1) The right to market and secure final approval in the 
 United States for the ANDA product or biosimilar biological 
 product at a date, whether certain or contingent, 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 
 ANDA product or biosimilar biological product.
 ``

    (2) A payment for reasonable litigation expenses not to 
 exceed--
 ``
        (A) for calendar year 2025, $7,500,000; or
 ``
        (B) for calendar year 2026 and each subsequent 
 calendar year, the amount determined for the preceding 
 calendar year adjusted to reflect the percentage 
 increase (if any) in the Producer Price Index for Legal 
 Services published by the Bureau of Labor Statistics of 
 the Department of Labor for the most recent calendar 
 year.
 ``

    (3) A covenant not to sue on any claim that the ANDA 
 product or biosimilar biological product infringes a United 
 States patent.
 ``
            (c) Antitrust Laws.--Except to the extent this section 
establishes an additional basis of liability, nothing in 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 this Act to the 
extent that 

section 5 applies to unfair methods of competition. Nothing 
in this section shall modify, impair, limit, or supersede the right of 
an ANDA filer or biosimilar biological product application filer to 
assert claims or counterclaims against any person, under the antitrust 
laws or other laws relating to unfair competition.
 ``
            (d) === Definitions. ===
-In this section:
 ``

    (1) Agreement.--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 this Act.
 ``

    (2) Agreement resolving or settling a patent infringement 
 claim.--The term `agreement resolving or settling a patent 
 infringement claim' includes any agreement that is entered into 
 within 30 days of the resolution or the settlement of the 
 claim, or any other agreement that is contingent upon, provides 
 a contingent condition for, or is otherwise related to the 
 resolution or settlement of the claim.
 ``

    (3) ANDA.--The term `ANDA' means an abbreviated 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 submitted pursuant to 

section 505

    (b)

    (2) of the 
 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355

    (b)

    (2) ).
 ``

    (4) ANDA filer.--The term `ANDA filer' means a party that 
 owns or controls an ANDA filed with the Secretary of Health and 
 Human Services or has the exclusive rights under such ANDA to 
 distribute the ANDA product.
 ``

    (5) ANDA product.--The term `ANDA product' means the 
 product to be manufactured under the ANDA that is the subject 
 of the patent infringement claim.
 ``

    (6) Biological product.--The term `biological product' 
 has the meaning given such term in 

section 351
            (i) (1) of the 
 Public Health Service Act (42 U.S.C. 262
            (i) (1) ).
 ``

    (7) Biological product license application.--The term 
 `biological product license application' means an application 
 under 

section 351

    (a) of the Public Health Service Act (42 
 U.S.C. 262

    (a) ).
 ``

    (8) Biological product license holder.--The term 
 `biological product license holder' means--
 ``
        (A) the holder of an approved biological product 
 license application for a biological product;
 ``
        (B) a person owning or controlling enforcement of 
 any patents that claim the biological product that is 
 the subject of such approved application; or
 ``
            (C) the predecessors, subsidiaries, divisions, 
 groups, and affiliates controlled by, controlling, or 
 under common control with any of the entities described 
 in subparagraphs
        (A) and
        (B) (such control to be 
 presumed by direct or indirect share ownership of 50 
 percent or greater), as well as the licensees, 
 licensors, successors, and assigns of each of the 
 entities.
 ``

    (9) Biosimilar biological product.--The term `biosimilar 
 biological product' means the product to be manufactured under 
 the biosimilar biological product application that is the 
 subject of the patent infringement claim.
 ``

    (10) Biosimilar biological product application.--The term 
 `biosimilar biological product application' means an 
 application under 

section 351

    (k) of the Public Health Service 
 Act (42 U.S.C. 262

    (k) ) for licensure of a biological product as 
 biosimilar to, or interchangeable with, a reference product.
 ``

    (11) Biosimilar biological product application filer.--
 The term `biosimilar biological product application filer' 
 means a party that owns or controls a biosimilar biological 
 product application filed with the Secretary of Health and 
 Human Services or has the exclusive rights under such 
 application to distribute the biosimilar biological product.
 ``

    (12) Drug product.--The term `drug product' has the 
 meaning given such term in 

section 314.3

    (b) of title 21, Code 
 of Federal Regulations (or any successor regulation).
 ``

    (13) Market.--The term `market' means the promotion, 
 offering for sale, selling, or distribution of a drug product.
 ``

    (14) 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) ).
 ``

    (15) NDA holder.--The term `NDA holder' means--
 ``
        (A) the holder of an approved NDA application for 
 a drug product;
 ``
        (B) a person owning or controlling enforcement of 
 the patent listed in the Approved Drug Products With 
 Therapeutic Equivalence Evaluations (commonly known as 
 the `FDA Orange Book') in connection with the NDA; or
 ``
            (C) the predecessors, subsidiaries, divisions, 
 groups, and affiliates controlled by, controlling, or 
 under common control with any of the entities described 
 in subparagraphs
        (A) and
        (B) (such control to be 
 presumed by direct or indirect share ownership of 50 
 percent or greater), as well as the licensees, 
 licensors, successors, and assigns of each of the 
 entities.
 ``

    (16) Party.--The term `party' means any person, 
 partnership, corporation, or other legal entity.
 ``

    (17) Patent infringement.--The term `patent infringement' 
 means infringement of any patent or of any filed patent 
 application, including any extension, reissue, renewal, 
 division, continuation, continuation in part, reexamination, 
 patent term restoration, patents of addition, and extensions 
 thereof.
 ``

    (18) Patent infringement claim.--The term `patent 
 infringement claim' means any allegation made to an ANDA filer 
 or biosimilar biological product application filer, whether or 
 not included in a complaint filed with a court of law, that its 
 ANDA or ANDA product, or biosimilar biological product 
 application or biosimilar biological product, may infringe any 
 patent held by, or exclusively licensed to, the NDA holder or 
 biological product license holder of the drug product or 
 biological product, as applicable.
 ``

    (19) Statutory exclusivity.--The term `statutory 
 exclusivity' means those prohibitions on the submission or the 
 approval of drug applications under clauses
            (ii) through
            (iv) of 

section 505
            (c) (3)
        (E) , clauses
            (ii) through
            (iv) of 

section 505

    (j)

    (5)
        (F) , 

section 527, 

section 505A, or 

section 505E of the 
 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355
            (c) (3)
        (E) , 
 355

    (j)

    (5)
        (F) , 360cc, 355a, 355f), or on the submission or 
 licensing of biological product applications under 

section 351

    (k)

    (7) or paragraph

    (2) or

    (3) of 

section 351
            (m) of the 
 Public Health Service Act (42 U.S.C. 262) or under 

section 527 
 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
 360cc).''.

    (b) Effective Date.--

Section 27 of the Federal Trade Commission 
Act, as added by this section, shall apply to all agreements described 
in 

section 27

    (a)

    (1) of that Act entered into on or after the date of 
enactment of this Act.

SEC. 4. CERTIFICATION OF AGREEMENTS.

    (a) Notice of All Agreements.--

Section 1111

    (7) of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 (21 
U.S.C. 355 note) is amended by inserting ``, or the owner of a patent 
for which a claim of infringement could reasonably be asserted against 
any person for making, using, offering to sell, selling, or importing 
into the United States a biological product that is the subject of a 
biosimilar biological product application'' before the period at the 
end.

    (b) Certification of Agreements.--

Section 1112 of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 (21 
U.S.C. 355 note) is amended by adding at the end the following:
 ``
            (d) Certification.--The Chief Executive Officer or the company 
official responsible for negotiating any agreement under subsection

    (a) or

    (b) that is required to be filed under subsection
            (c) , within 30 
days after such filing, shall execute and file with the Assistant 
Attorney General and the Commission a certification as follows: `I 
declare that the following 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 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 agreements, 
 representations, commitments, or promises between the parties 
 that are responsive to subsection

    (a) or

    (b) of such 

section 1112 and have not been reduced to writing.'''.

SEC. 5. NOTIFICATION OF AGREEMENTS.

 

Section 1112 of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (21 U.S.C. 355 note), as amended by 

section 4

    (b) , is further amended by adding at the end the following:
 ``

    (e) Rule of Construction.--
 ``

    (1) In general.--An agreement that is required under 
 subsection

    (a) or

    (b) shall include agreements resolving any 
 outstanding disputes, including agreements resolving or 
 settling a Patent Trial and Appeal Board proceeding.
 ``

    (2) === Definition. ===
-For purposes of subparagraph
        (A) , the 
 term `Patent Trial and Appeal Board proceeding' means a 
 proceeding conducted by the Patent Trial and Appeal Board of 
 the United States Patent and Trademark Office, including an 
 inter partes review instituted under chapter 31 of title 35, 
 United States Code, a post-grant review instituted under 
 chapter 32 of that title (including a proceeding instituted 
 pursuant to the transitional program for covered business 
 method patents, as described in 

section 18 of the Leahy-Smith 
 America Invents Act (35 U.S.C. 321 note)), and a derivation 
 proceeding instituted under 

section 135 of that title.''.

SEC. 6. 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 27 
of the Federal Trade Commission Act or'' after ``that the agreement has 
violated''.

SEC. 7. 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) --
        (A) by moving the margin 2 ems to the left; and
        (B) by inserting ``or'' after the semicolon; and

    (3) by inserting after subparagraph
        (E) the following:
 ``
        (F) under 

section 27,''.

SEC. 8. REPORT ON ADDITIONAL EXCLUSION.

    (1) In general.--Not later than 1 year after the date of 
 enactment of this Act, the Federal Trade Commission shall 
 submit to the Committee on the Judiciary of the Senate and the 
 Committee on the Judiciary of the House of Representatives a 
 recommendation, and the Commission's basis for such 
 recommendation, regarding a potential amendment to include in 
 

section 27

    (b) of the Federal Trade Commission Act (as added by 
 

section 3) an additional exclusion for consideration granted by 
 an NDA holder to a ANDA filer or by a biological product 
 license holder to a biosimilar biological product application 
 filer as part of the resolution or settlement, a release, 
 waiver, or limitation of a claim for damages or other monetary 
 relief.

    (2) === Definitions. ===
-In this section, the terms ``ANDA 
 filer'', ``biological product license holder'', ``biosimilar 
 biological product application filer'', and ``NDA holder'' have 
 the meanings given such terms in 

section 27
            (d) of the Federal 
 Trade Commission Act (as added by 

section 3).

SEC. 9. 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, not later than 6 years after the date on which 
the parties to the agreement file the certification under 

section 1112
            (d) of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (21 U.S.C. 355 note).

SEC. 10. SEVERABILITY.

 If any provision of this Act, an amendment made by this Act, or the 
application of such provision or amendment to any person or 
circumstance is held to be unconstitutional, the remainder of this Act, 
the amendments made by this Act, and the application of the provisions 
of such Act or amendments to any person or circumstance shall not be 
affected.
 Calendar No. 46

119th CONGRESS

 1st Session

 S. 1096

_______________________________________________________________________

 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 to 
prohibit biological product manufacturers from compensating biosimilar 
 and interchangeable companies to delay the entry of biosimilar 
 biological products and interchangeable biological products.

_______________________________________________________________________

 April 10, 2025

 Reported with an amendment