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General Assembly Raised Bill No. 251
February Session, 2020
LCO No. 2073
Referred to Committee on GENERAL LAW
Introduced by:
(GL)
AN ACT CONCERNING TH E AVAILABILITY OF GENERIC
PHARMACEUTICALS.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. (NEW) (Effective October 1, 2020) For purposes of this 1
section and section 2 of this act: 2
(1) "ANDA" means abbreviated new drug application. 3
(2) "ANDA filer" means a party that owns or controls an ANDA filed 4
with the Food and Drug Administration or has the exclusive rights 5
under that ANDA to distribute the ANDA product. 6
(3) "Agreement resolving or settling a patent infringement claim" 7
includes any agreement that is entered into not later than thirty days 8
after the resolution or the settlement of the claim, or any other 9
agreement that is contingent upon, provides a contingent condition for, 10
or is otherwise related to the resolution or settlement of the claim. 11
"Agreement resolving or settling a patent infringement claim" includes, 12
but is not limited to, the following: 13 Raised Bill No. 251
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(A) Any agreement required to be provided to the Federal Trade 14
Commission or the Antitrust Division of the United States Department 15
of Justice under the Medicare Prescription Drug, Improvement, and 16
Modernization Act of 2003. 17
(B) Any agreement between a biosimilar or interchangeable 18
biological product applicant and a reference drug product sponsor that 19
resolves patent claims between the applicant and sponsor. 20
(4) "Biosimilar biological product application filer" means a party that 21
owns or controls a biosimilar biological product application filed with 22
the Food and Drug Administration under subsection (k) of section 351 23
of the Public Health Service Act, 42 USC 262, for licensure of a biological 24
product as biosimilar to, or interchangeable with, a reference drug 25
product or that has the exclusive rights under the application to 26
distribute the biosimilar biological product. 27
(5) "NDA" means new drug application. 28
(6) "Nonreference drug filer" means (A) an ANDA filer, or (B) a 29
biosimilar biological product application filer. 30
(7) "Nonreference drug product" means the product to be 31
manufactured under an ANDA that is the subject of the patent 32
infringement claim, a biosimilar biological product that is the product 33
to be manufactured under the biosimilar biological product application 34
that is the subject of the patent infringement claim, or both. 35
(8) "Patent infringement" means infringement of any patent or of any 36
filed patent application, extension, reissue, renewal, division, 37
continuation, continuation in part, reexamination, patent term 38
restoration, patents of addition and extensions thereof. 39
(9) "Patent infringement claim" means any allegation made to a 40
nonreference drug filer, whether or not included in a complaint filed 41
with a court of law, that its nonreference drug product or application 42
infringes any patent held by, or exclusively licensed to, the reference 43 Raised Bill No. 251
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drug holder. 44
(10) "Reference drug holder" means: 45
(A) A brand holder that is any of the following: 46
(i) The holder of an approved NDA for a drug product application 47
filed under subsection (b) of section 505 of the Federal Food, Drug, and 48
Cosmetic Act, 21 USC 355, 49
(ii) A person owning or controlling enforcement of the patent listed 50
in the Approved Drug Products With Therapeutic Equivalence 51
Evaluations, commonly known as the "FDA Orange Book" in connection 52
with the NDA, or 53
(iii) The predecessors, subsidiaries, divisions, groups and affiliates 54
controlled by, controlling or under common control with, any of the 55
entities described in this subparagraph or subparagraph (B) of this 56
subdivision, with control to be presumed by direct or indirect share 57
ownership of fifty per cent or greater, as well as the licensees, licensors, 58
successors and assigns of each of those entities, or 59
(B) A biological product license holder, which includes any of the 60
following: 61
(i) The holder of an approved biological product license application 62
for a biological drug product under subsection (a) of section 351 of the 63
Public Health Service Act, 42 USC 262, 64
(ii) A person owning or controlling enforcement of any patents that 65
claim the biological product that is the subject of the approved biological 66
patent license application, or 67
(iii) The predecessors, subsidiaries, divisions, groups and affiliates 68
controlled by, controlling or under common control with, any of the 69
entities described in this subparagraph or subparagraph (A) of this 70
subdivision, with control to be presumed by direct or indirect share 71
ownership of fifty per cent or greater, as well as the licensees, licensors, 72 Raised Bill No. 251
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successors and assigns of each of those entities. 73
(11) "Reference drug product" means the product to be manufactured 74
by the reference drug holder and includes branded drugs of the NDA 75
holder and the biological drug product of the biological product license 76
applicant. 77
(12) "Statutory exclusivity" means those prohibitions on the approval 78
of drug applications under subsection (c) of section 505, section 527 or 79
505A of the Federal Food, Drug, and Cosmetic Act, 21 USC 355, 360cc 80
and 355a, or on the licensing of biological product applications under 81
subsection (k) or (m) of section 262 of the Public Health Service Act, 42 82
USC 262. 83
Sec. 2. (NEW) (Effective October 1, 2020) (a) (1) Except as provided in 84
subdivision (3) of this subsection, an agreement resolving or settling, on 85
a final or interim basis, a patent infringement claim, shall be presumed 86
to have anticompetitive effects and shall be a violation of this section if 87
both of the following apply: 88
(A) A nonreference drug filer receives anything of value from 89
another company asserting patent infringement, including, but not 90
limited to, an exclusive license or a promise that the brand company will 91
not launch an authorized generic version of its brand drug; and 92
(B) The nonreference drug filer agrees to limit or forego research, 93
development, manufacturing, marketing or sales of the nonreference 94
drug filer's product for any period of time. 95
(2) As used in subparagraph (A) of subdivision (1) of this subsection, 96
"anything of value" does not include a settlement of a patent 97
infringement claim in which the consideration granted by the brand or 98
reference drug filer to the nonreference drug filer as part of the 99
resolution or settlement consists of one or more of the following: 100
(A) The right to market the competing product in the United States 101
before the expiration of either: 102 Raised Bill No. 251
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(i) A patent that is the basis for the patent infringement claim, or 103
(ii) A patent right or other statutory exclusivity that would prevent 104
the marketing of the drug, 105
(B) A covenant not to sue on a claim that the nonreference drug 106
product infringes a United States patent; 107
(C) Compensation for saved reasonable future litigation expenses of 108
the reference drug holder but only if both of the following are true: 109
(i) The total compensation for saved litigation expenses is reflected in 110
budgets that the reference drug holder documented and adopted at least 111
six months before the settlement, and 112
(ii) The compensation does not exceed the lower of the following: 113
(I) Seven million five hundred thousand dollars, or 114
(II) Five per cent of the revenue that the nonreference drug holder 115
projected or forecasted it would receive in the first three years of sales 116
of its version of the reference drug documented at least twelve months 117
before the settlement. If no projections or forecasts are available, the 118
compensation does not exceed two hundred fifty thousand dollars; 119
(D) An agreement resolving or settling a patent infringement claim 120
that permits a nonreference drug filer to begin selling, offering for sale 121
or distributing the nonreference drug product if the reference drug 122
holder seeks approval to launch, obtains approval to launch or launches 123
a different dosage, strength or form of the reference drug having the 124
same active ingredient before the date set by the agreement for entry of 125
the nonreference drug filer. A different form of the reference drug does 126
not include an authorized generic version of the reference drug; 127
(E) An agreement by the reference drug holder not to interfere with 128
the nonreference drug filer's ability to secure and maintain regulatory 129
approval to market the nonreference drug product or an agreement to 130
facilitate the nonreference drug filer's ability to secure and maintain 131 Raised Bill No. 251
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regulatory approval to market the nonreference drug product; or 132
(F) An agreement resolving a patent infringement claim in which the 133
reference drug holder forgives the potential damages accrued by a 134
nonreference drug holder for an at-risk launch of the nonreference drug 135
product that is the subject of that claim. 136
(3) Parties to an agreement are not in violation of subdivision (1) of 137
this subsection if they can demonstrate by a preponderance of the 138
evidence that either of the following are met: 139
(A) The value received by the nonreference drug filer described in 140
subparagraph (A) of subdivision (1) of this subsection is a fair and 141
reasonable compensation solely for other goods or services that the 142
nonreference drug filer has promised to provide, or 143
(B) The agreement has directly generated procompetitive benefits 144
and the procompetitive benefits of the agreement outweigh the 145
anticompetitive effects of the agreement. 146
(b) In determining whether the parties to the agreement have met 147
their burden under subdivision (3) of subsection (a) of this section, the 148
factfinder shall not presume any of the following: 149
(1) That entry into the marketplace could not have occurred until the 150
expiration of the relevant patent exclusivity or that the agreement's 151
provision for entry of the nonreference drug product before the 152
expiration of any patent exclusivity means that the agreement is 153
procompetitive within the meaning of subparagraph (B) of subdivision 154
(3) of subsection (a) of this section, 155
(2) That any patent is enforceable and infringed by the nonreference 156
drug filer in the absence of a final adjudication binding on the filer of 157
those issues, 158
(3) That the agreement caused no delay in entry of the nonreference 159
drug filer's drug product because of the lack of federal Food and Drug 160
Administration approval of that or of another nonreference drug 161 Raised Bill No. 251
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product, or 162
(4) That the agreement caused no harm or delay due to the possibility 163
that the nonreference drug filer's drug product might infringe some 164
patent that has not been asserted against the nonreference drug filer or 165
that is not subject to a final and binding adjudication on that filer as to 166
the patent's scope, enforceability and infringement. 167
This subsection shall not be construed to preclude a party from 168
introducing evidence regarding subdivisions (1) to (4), inclusive, of this 169
subsection and shall not be construed to preclude the factfinder from 170
making a determination regarding said subdivisions based on the full 171
scope of the evidence. 172
(c) In determining whether the parties to the agreement have met 173
their burden under subdivision (3) of subsection (a) of this section, the 174
factfinder shall presume that the relevant product market is that market 175
consisting of the brand or reference drug of the company alleging patent 176
infringement and the drug product of the nonreference company 177
accused of infringement and any other biological product that is 178
licensed as biosimilar or is an AB-rated generic to the reference product. 179
(d) (1) The provisions of this section shall not modify, impair, limit or 180
supersede the right of any drug company applicant to assert claims or 181
counterclaims against any person under the antitrust laws or other laws 182
relating to unfair competition of the federal antitrust law or state law. 183
(2) If any provision of this section, an amendment made to this 184
section or the application of any provision or amendment to any person 185
or circumstance is held to be unconstitutional, the remainder of this 186
section, the amendments made to this section and the application of the 187
provisions of this section or amendments to any person or circumstance 188
shall not be affected. 189
(e) (1) (A) Each person that violates or assists in the violation of this 190
section shall forfeit and pay to the state a civil penalty sufficient to deter 191
violations of this section, as follows: 192 Raised Bill No. 251
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(i) If the person who violated this section received any value due to 193
that violation, an amount up to three times the value received by the 194
party that is reasonably attributable to the violation of this section, or 195
twenty million dollars, whichever is greater. 196
(ii) If the violator has not received anything of value as described in 197
subparagraph (A)(i), an amount up to three times the value given to 198
other parties to the agreement reasonably attributable to the violation of 199
this section, or twenty million dollars, whichever is greater. 200
(iii) For purposes of this subdivision, "reasonably attributable to the 201
violation" shall be determined by the state's share of the market for the 202
brand drug at issue in the agreement. 203
(B) Any penalty described in subparagraph (A) of this subdivision 204
shall accrue only to the state and shall be recovered in a civil action 205
brought by the Attorney General against any party to an agreement that 206
violates this section. 207
(2) Each party that violates or assists in the violation of this section 208
shall be liable for any damages, penalties, costs, fees, injunctions, or 209
other remedies that may be just and reasonable, as determined by the 210
court. 211
(3) If the state is awarded penalties under subparagraph (A) of 212
subdivision (1) of this subsection, it may not recover penalties pursuant 213
to subdivision (2) of this subsection. This section shall not be construed 214
to foreclose the state's ability to claim any relief or damages available in 215
subdivision (2) of this subsection, other than those that are penalties. 216
(4) An action to enforce a cause of action for a violation of this section 217
shall be commenced within four years after the cause of action accrued. 218
This act shall take effect as follows and shall amend the following
sections:
Section 1 October 1, 2020 New section
Sec. 2 October 1, 2020 New section Raised Bill No. 251
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Statement of Purpose:
To preserve consumer access to affordable generic drugs.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
underlined.]