Sec. 3. Unlawful compensation for delay

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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: 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. A violation of this section shall be treated as an unfair method of competition in violation of section 5(a)(1). Subject to subparagraph (B), an agreement described in paragraph

(1)shall be presumed to have anticompetitive effects for purposes of such paragraph 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 forgo 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 a preponderance of the 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 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). 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. 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. In determining the amount of the civil penalty described in subparagraph (A), 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 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 other matters that justice requires. 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. 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: 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— 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— for calendar year 2025, $7,500,000; or 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. A covenant not to sue on any claim that the ANDA product or biosimilar biological product infringes a United States patent. 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. 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 submitted pursuant to 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 Secretary of Health and Human Services 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 Secretary of Health and Human Services 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 market means the promotion, offering for sale, selling, or distribution of a drug product. 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, including any 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 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. 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 ). . 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.

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