S1096-119

What This Bill Does

Treats certain drug and biologic patent settlements as presumptively anticompetitive when a generic or biosimilar applicant receives value and delays research, development, manufacturing, marketing, or sales, and gives the Federal Trade Commission civil-penalty and litigation tools to police those agreements.

Who Benefits and How

Patients, health plans, and federal drug purchasers benefit if pay-for-delay settlements are deterred and lower-cost generic or biosimilar competition reaches the market earlier. Generic drug applicants and biosimilar applicants benefit when the bill protects earlier market entry, preserves antitrust counterclaims, and narrows settlement structures that trade value for delayed competition. FTC competition staff benefit from explicit section 27 authority, a 6-year enforcement window, civil penalties up to three times the attributable value, and direct litigation authority. DOJ antitrust staff benefit from CEO certifications that must describe complete written and oral settlement terms.

Who Bears the Burden and How

Brand drug manufacturers and biologic license holders bear new settlement limits because value-for-delay patent settlements are presumed anticompetitive unless they satisfy the statutory defenses. Generic drug applicants and biosimilar applicants also bear compliance duties because settlement certifications must be complete and violations can trigger penalties or 180-day exclusivity forfeiture. Company executives responsible for negotiations must certify filings within 30 days and expose incomplete side agreements. FTC staff must administer reports, enforcement actions, penalty calculations, and recommendations on whether releases of damages claims should get an additional exclusion.

Key Provisions

• Establishes a new Federal Trade Commission Act section 27 on compensation for delayed generic or biosimilar entry.
• Requires a presumption of anticompetitive effect when an ANDA filer or biosimilar applicant receives anything of value and agrees to delay research, development, manufacturing, marketing, or sales.
• Provides defenses for compensation solely for other goods or services or for settlements whose procompetitive benefits outweigh anticompetitive effects.
• Authorizes FTC civil actions, mandatory injunctions, equitable relief, and civil penalties up to three times the attributable value.
• Requires certifications that filed settlement materials include final agreements, ancillary agreements, and written descriptions of responsive oral commitments.
• Includes Patent Trial and Appeal Board dispute settlements in notification duties and adds section 27 violations as a forfeiture trigger for 180-day generic exclusivity.
• Requires FTC to report within one year on whether damages-release consideration should receive an additional exclusion and sets a 6-year limitations period after certification.