Sec. 4. Preserving access through FTC actions

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A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

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: The Commission may initiate a proceeding to enforce the provisions 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 or biological product. Subject to subparagraph (B), in such a proceeding, an agreement shall be presumed to have anticompetitive effects and shall be a violation of this section if— an ANDA filer or a biosimilar biological product application filer receives anything of value, including an exclusive license; and the ANDA filer or biosimilar biological product application filer agrees to limit or forego research, development, manufacturing, marketing, or sales of the ANDA product or biosimilar biological product, as applicable, for any period of time.

Subparagraph

(A)shall not apply if the parties to such agreement demonstrate by clear and convincing evidence that— 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 the procompetitive benefits of the agreement outweigh the anticompetitive effects of the agreement. In determining whether the settling parties have met their burden under subsection (a)(2)(B), the fact finder shall not presume— that entry would not have occurred until the expiration of the relevant patent or statutory exclusivity; or that the agreement’s provision for entry of the ANDA product or biosimilar biological product prior to the expiration of the relevant patent or statutory exclusivity means that the agreement is procompetitive. Nothing in this section shall prohibit a resolution or settlement of a patent infringement claim in which the consideration granted by the NDA holder or biological product license holder to the ANDA filer or biosimilar biological product application filer, respectively, as part of the resolution or settlement includes only one or more of the following: The right to market the ANDA product or biosimilar biological product in the United States prior to the expiration of— any patent that is the basis for the patent infringement claim; or any patent right or other statutory exclusivity that would prevent the marketing of such ANDA product or biosimilar biological product. A payment for reasonable litigation expenses not to exceed $7,500,000. A covenant not to sue on any claim that the ANDA product or biosimilar biological product infringes a United States patent. A violation of this section shall be treated as a violation of section 5. Any party that is subject to a final order of the Commission, issued in an administrative adjudicative proceeding under the authority of subsection (a)(1), may, within 30 days of the issuance of such order, petition for review of such order in— the United States Court of Appeals for the District of Columbia Circuit; the United States Court of Appeals for the circuit in which the ultimate parent entity, as defined in section 801.1(a)(3) of title 16, Code of Federal Regulations, or any successor thereto, of the NDA holder or biological product license holder is incorporated as of the date that the NDA or biological product license application, as applicable, is filed with the Commissioner of Food and Drugs; or the United States Court of Appeals for the circuit in which the ultimate parent entity of the ANDA filer or biosimilar biological product application filer is incorporated as of the date that the ANDA or biosimilar biological product application is filed with the Commissioner of Food and Drugs. In a proceeding 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 conclusive. 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. Each party that violates or assists in the violation of this section shall forfeit and pay to the United States a civil penalty sufficient to deter violations of this section, but in no event greater than 3 times the value received by the party that is reasonably attributable to the violation of this section. If no such value has been received by the NDA holder or biological product license holder, the penalty to the NDA holder or biological product license holder shall be sufficient to deter violations, but in no event greater than 3 times the value given to the ANDA filer or biosimilar biological product application filer reasonably attributable to the violation of this section. Such penalty shall accrue to the United States and may be recovered in a civil action brought by the Commission, in its own name by any of its attorneys designated by it for such purpose, in a district court of the United States against any party that violates this section. In such actions, the United States district courts are empowered to grant mandatory injunctions and such other and further equitable relief as they deem appropriate. If the Commission has issued a cease and desist order with respect to a party in an administrative adjudicative proceeding under the authority of subsection (a)(1), an action brought pursuant to paragraph

(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). In an action under subparagraph (A), the findings of the Commission as to the material facts in the administrative adjudicative proceeding with respect to the violation of this section by a party shall be conclusive unless— the terms of such cease and desist order expressly provide that the Commission’s findings shall not be conclusive; or the order became final by reason of section 5(g)(1), in which case such finding shall be conclusive if supported by evidence. In determining the amount of the civil penalty described in this section, the court shall take into account— the nature, circumstances, extent, and gravity of the violation; with respect to the violator, the degree of culpability, any history of violations, the ability to pay, any effect on the ability to continue doing business, profits earned by the NDA holder or biological product license holder, compensation received by the ANDA filer or biosimilar biological product application filer, and the amount of commerce affected; and other matters that justice requires. Remedies provided in this subsection are in addition to, and not in lieu of, any other remedy provided by Federal law. Nothing in this paragraph shall be construed to affect any authority of the Commission under any other provision of law. In this section: 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. 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. 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 filed under section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act ( 21 U.S.C. 355(b)(2) ). The term ANDA filer means a party that owns or controls an ANDA filed with the Food and Drug Administration or has the exclusive rights under such ANDA to distribute the ANDA product. The term ANDA product means the product to be manufactured under the ANDA that is the subject of the patent infringement claim. 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) ). 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) ). The term biological product license holder means— the holder of an approved biological product license application for a biological product; a person owning or controlling enforcement of any patents that claim the biological product that is the subject of such approved application; or 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. 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. 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. The term biosimilar biological product application filer means a party that owns or controls a biosimilar biological product application filed with the Food and Drug Administration or has the exclusive rights under such application to distribute the biosimilar biological 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). 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) ). The term NDA holder means— the holder of an approved NDA application for a drug product; 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 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. The term party means any person, partnership, corporation, or other legal entity. The term patent infringement means infringement of any patent or of any filed patent application, extension, reissue, renewal, division, continuation, continuation in part, reexamination, patent term restoration, patents of addition, and extensions thereof. 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 biological product license application or 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. The term statutory exclusivity means those prohibitions on 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 exclusivity), or section 505A (pediatric exclusivity) of the Federal Food, Drug, and Cosmetic Act ( 21 U.S.C. 355(c)(3)(E) , 360cc, 355a), or on the licensing of biological product applications under section 351(k)(7) (12-year exclusivity) or paragraph

(2)or

(3)of section 351(m) (pediatric exclusivity) of the Public Health Service Act ( 42 U.S.C. 262 ) or under section 527 of the Federal Food, Drug, and Cosmetic Act (orphan drug exclusivity). . Section 27 of the Federal Trade Commission Act, as added by this paragraph, shall apply to all agreements described in section 27(a)(1) of that Act entered into after June 17, 2013. Section 27(f) of the Federal Trade Commission Act, as added by this paragraph, shall apply to agreements entered into on or after the date of enactment of this Act. 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: 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— represent the complete, final, and exclusive agreement between the parties; include any ancillary agreements that are contingent upon, provide a contingent condition for, or are otherwise related to, the referenced agreement; and 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. . . 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 . Section 16(a)(2) of the Federal Trade Commission Act ( 15 U.S.C. 56(a)(2) ) is amended— in subparagraph (D), by striking or after the semicolon; in subparagraph (E), by inserting or after the semicolon; and inserting after subparagraph

(E)the following: under section 27; . The Federal Trade Commission shall commence any enforcement proceeding described in section 27 of the Federal Trade Commission Act, as added by paragraph (1), except for an action described in section 27(f)(2) of the Federal Trade Commission Act, 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). Section 505(q)(1) of the Federal Food, Drug, and Cosmetic Act ( 21 U.S.C. 355(q)(1) ) is amended— in subparagraph (E)— by striking If the Secretary and inserting the following: If the Secretary ; by striking the second sentence and inserting the following: In determining whether a petition was submitted with the primary purpose of delaying the approval of an application, the Secretary shall consider— whether it appears, based on the date that relevant information relied upon in the petition became known to the petitioner (or reasonably should have been known to the petitioner), as certified by the petitioner in accordance with subparagraph (H), that the petitioner has taken an unreasonable length of time to submit the petition; whether the petitioner has submitted multiple or serial petitions raising issues that reasonably could have been known to the petitioner at the time of submission of the earlier petition or petitions; whether the petition was submitted close in time to a known, first date upon which an application under subsection (b)(2) of this section or section 351(k) of the Public Health Service Act could be approved; whether the petition was submitted without any data or information in support of the scientific positions set forth in the petition; whether the petition raises the same or substantially similar issues as a prior petition to which the Secretary has responded substantively already, particularly if the subsequent submission follows the earlier response closely in time; whether the petition concerns standards for approval of a drug for which the Secretary has provided an opportunity for public input, such as draft or final product-specific guidance applicable to the drug, and the petitioner has not provided comment other than through the petition; whether the petition requests that other applicants meet standards for testing, data, or labeling for a drug that are more onerous or rigorous than the standards applicable to, as applicable, the listed drug, reference product, or petitioner’s version of the same drug; the history of the petitioner with the Food and Drug Administration, such as whether the petitioner has a history of submitting petitions that the Secretary has determined were submitted with the primary purpose of delay; and other relevant considerations, as the Secretary may describe in guidance. ; and by adding at the end the following: The Secretary shall publish on the internet website of the Food and Drug Administration a list of any petitions that the Secretary determines were submitted for the primary purpose of delaying the approval of an application. The Secretary shall establish procedures for referring to the Federal Trade Commission any petition or supplement to a petition that the Secretary determines was submitted with the primary purpose of delaying approval of an application. Such procedures shall include notification to the petitioner and an opportunity for the petitioner to respond to the Secretary prior to referral to the Federal Trade Commission. ; and by adding at the end the following: The Secretary may establish a time period after the relevant information relied upon in a petition became known to the petitioner (or reasonably should have been known to a petitioner), as certified by the petitioner in accordance with subparagraph (H), and any petition that is submitted after such time period has passed shall be summarily denied. . In this subsection: The term Commission means the Federal Trade Commission. The term covered application means an application filed pursuant to subsection (b)(2) or

(j)of section 505 of the Federal Food, Drug, and Cosmetic Act ( 21 U.S.C. 355 ) or section 351(k) of the Public Health Service Act ( 42 U.S.C. 262(k) ). The term covered petition means a petition, or a supplement to a petition, filed under section 505(q) of the Federal Food, Drug, and Cosmetic Act ( 21 U.S.C. 355(q) ). The term person — means an individual or entity; and includes— a successor and an assign of an entity; and a joint venture, subsidiary, partnership, division, group, and affiliate controlled by an entity, and a successor and an assign of a joint venture, subsidiary, partnership, division, group, and affiliate controlled by an entity. The term series of covered petitions means any group of more than 1 covered petition relating to the same covered application. The term sham means a covered petition that is objectively baseless and that attempts to use a governmental process, as opposed to the outcome of that process, to interfere with the business of a competitor, or a series of covered petitions that attempts to use a governmental process, as opposed to the outcome of that process, to interfere with the business of a competitor. A person submitting or causing the submission of a covered petition or a series of covered petitions that is a sham shall be liable for engaging in an unfair method of competition under section 5(a)(1) of the Federal Trade Commission Act ( 15 U.S.C. 45(a)(1) ). If the Commission has reason to believe that the submission of a covered petition or a series of covered petitions constitutes a violation of section 5(a)(1) of the Federal Trade Commission Act ( 15 U.S.C. 45(a)(1) ), the Commission may commence a civil action to recover a civil penalty and seek other appropriate relief in a district court of the United States against any person that submitted or caused to be submitted such covered petition or such series of covered petitions, including successors or assigns. In a civil action under subparagraph (A), a covered petition shall be presumed to be part of a series of covered petitions that is a sham under paragraph

(2)of this subsection if— the Secretary of Health and Human Services— has determined that the covered petition was submitted with the primary purpose of delaying the approval of a covered application; and has referred such determination to the Federal Trade Commission in writing, including a reasoned basis for the determination; and the covered petition was part of a series of covered petitions. The presumption in subparagraph

(B)shall not apply if the defendant establishes, by a preponderance of the evidence, that the series of covered petitions that includes the covered petition referred to the Commission by the Secretary of Health and Human Services is not a sham. In an action under subparagraph (A), any person that has been found liable for a violation of section 5(a)(1) of the Federal Trade Commission Act ( 15 U.S.C. 45(a)(1) ) shall be subject to a civil penalty for each violation of not more than the greater of— any revenue earned from the sale by such person of any drug product, referenced in a covered application that was the subject of a covered petition or a series of covered petitions that is a sham, during the period in which the covered petition or series of covered petitions was under review by the Secretary of Health and Human Services; or $50,000 for each calendar day that each covered petition that is a sham or that was part of a series of covered petitions that is a sham was under review by the Secretary of Health and Human Services. Nothing in this subsection 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. The civil penalty provided in this paragraph is in addition to, and not in lieu of, any other remedies provided by Federal law, including under section 16 of the Clayton Act ( 15 U.S.C. 26 ) or under section 13(b) of the Federal Trade Commission Act ( 15 U.S.C. 53(b) ). Nothing in this subparagraph shall be construed to affect any authority of the Commission under any other provision of law. This subsection shall apply to any covered petition submitted on or after the date of enactment of this Act.

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