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| 2 | 2 | | |
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| 3 | 3 | | LCO No. 2073 1 of 9 |
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| 4 | 4 | | |
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| 5 | 5 | | General Assembly Raised Bill No. 251 |
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| 6 | 6 | | February Session, 2020 |
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| 7 | 7 | | LCO No. 2073 |
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| 8 | 8 | | |
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| 9 | 9 | | |
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| 10 | 10 | | Referred to Committee on GENERAL LAW |
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| 11 | 11 | | |
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| 12 | 12 | | |
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| 13 | 13 | | Introduced by: |
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| 14 | 14 | | (GL) |
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| 15 | 15 | | |
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| 16 | 16 | | |
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| 17 | 17 | | |
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| 18 | 18 | | |
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| 19 | 19 | | AN ACT CONCERNING TH E AVAILABILITY OF GENERIC |
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| 20 | 20 | | PHARMACEUTICALS. |
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| 21 | 21 | | Be it enacted by the Senate and House of Representatives in General |
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| 22 | 22 | | Assembly convened: |
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| 23 | 23 | | |
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| 24 | 24 | | Section 1. (NEW) (Effective October 1, 2020) For purposes of this 1 |
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| 25 | 25 | | section and section 2 of this act: 2 |
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| 26 | 26 | | (1) "ANDA" means abbreviated new drug application. 3 |
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| 27 | 27 | | (2) "ANDA filer" means a party that owns or controls an ANDA filed 4 |
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| 28 | 28 | | with the Food and Drug Administration or has the exclusive rights 5 |
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| 29 | 29 | | under that ANDA to distribute the ANDA product. 6 |
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| 30 | 30 | | (3) "Agreement resolving or settling a patent infringement claim" 7 |
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| 31 | 31 | | includes any agreement that is entered into not later than thirty days 8 |
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| 32 | 32 | | after the resolution or the settlement of the claim, or any other 9 |
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| 33 | 33 | | agreement that is contingent upon, provides a contingent condition for, 10 |
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| 34 | 34 | | or is otherwise related to the resolution or settlement of the claim. 11 |
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| 35 | 35 | | "Agreement resolving or settling a patent infringement claim" includes, 12 |
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| 36 | 36 | | but is not limited to, the following: 13 Raised Bill No. 251 |
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| 37 | 37 | | |
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| 38 | 38 | | |
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| 39 | 39 | | |
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| 40 | 40 | | LCO No. 2073 2 of 9 |
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| 41 | 41 | | |
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| 42 | 42 | | (A) Any agreement required to be provided to the Federal Trade 14 |
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| 43 | 43 | | Commission or the Antitrust Division of the United States Department 15 |
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| 44 | 44 | | of Justice under the Medicare Prescription Drug, Improvement, and 16 |
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| 45 | 45 | | Modernization Act of 2003. 17 |
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| 46 | 46 | | (B) Any agreement between a biosimilar or interchangeable 18 |
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| 47 | 47 | | biological product applicant and a reference drug product sponsor that 19 |
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| 48 | 48 | | resolves patent claims between the applicant and sponsor. 20 |
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| 49 | 49 | | (4) "Biosimilar biological product application filer" means a party that 21 |
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| 50 | 50 | | owns or controls a biosimilar biological product application filed with 22 |
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| 51 | 51 | | the Food and Drug Administration under subsection (k) of section 351 23 |
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| 52 | 52 | | of the Public Health Service Act, 42 USC 262, for licensure of a biological 24 |
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| 53 | 53 | | product as biosimilar to, or interchangeable with, a reference drug 25 |
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| 54 | 54 | | product or that has the exclusive rights under the application to 26 |
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| 55 | 55 | | distribute the biosimilar biological product. 27 |
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| 56 | 56 | | (5) "NDA" means new drug application. 28 |
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| 57 | 57 | | (6) "Nonreference drug filer" means (A) an ANDA filer, or (B) a 29 |
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| 58 | 58 | | biosimilar biological product application filer. 30 |
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| 59 | 59 | | (7) "Nonreference drug product" means the product to be 31 |
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| 60 | 60 | | manufactured under an ANDA that is the subject of the patent 32 |
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| 61 | 61 | | infringement claim, a biosimilar biological product that is the product 33 |
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| 62 | 62 | | to be manufactured under the biosimilar biological product application 34 |
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| 63 | 63 | | that is the subject of the patent infringement claim, or both. 35 |
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| 64 | 64 | | (8) "Patent infringement" means infringement of any patent or of any 36 |
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| 65 | 65 | | filed patent application, extension, reissue, renewal, division, 37 |
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| 66 | 66 | | continuation, continuation in part, reexamination, patent term 38 |
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| 67 | 67 | | restoration, patents of addition and extensions thereof. 39 |
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| 68 | 68 | | (9) "Patent infringement claim" means any allegation made to a 40 |
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| 69 | 69 | | nonreference drug filer, whether or not included in a complaint filed 41 |
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| 70 | 70 | | with a court of law, that its nonreference drug product or application 42 |
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| 71 | 71 | | infringes any patent held by, or exclusively licensed to, the reference 43 Raised Bill No. 251 |
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| 72 | 72 | | |
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| 73 | 73 | | |
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| 74 | 74 | | |
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| 75 | 75 | | LCO No. 2073 3 of 9 |
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| 76 | 76 | | |
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| 77 | 77 | | drug holder. 44 |
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| 78 | 78 | | (10) "Reference drug holder" means: 45 |
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| 79 | 79 | | (A) A brand holder that is any of the following: 46 |
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| 80 | 80 | | (i) The holder of an approved NDA for a drug product application 47 |
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| 81 | 81 | | filed under subsection (b) of section 505 of the Federal Food, Drug, and 48 |
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| 82 | 82 | | Cosmetic Act, 21 USC 355, 49 |
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| 83 | 83 | | (ii) A person owning or controlling enforcement of the patent listed 50 |
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| 84 | 84 | | in the Approved Drug Products With Therapeutic Equivalence 51 |
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| 85 | 85 | | Evaluations, commonly known as the "FDA Orange Book" in connection 52 |
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| 86 | 86 | | with the NDA, or 53 |
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| 87 | 87 | | (iii) The predecessors, subsidiaries, divisions, groups and affiliates 54 |
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| 88 | 88 | | controlled by, controlling or under common control with, any of the 55 |
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| 89 | 89 | | entities described in this subparagraph or subparagraph (B) of this 56 |
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| 90 | 90 | | subdivision, with control to be presumed by direct or indirect share 57 |
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| 91 | 91 | | ownership of fifty per cent or greater, as well as the licensees, licensors, 58 |
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| 92 | 92 | | successors and assigns of each of those entities, or 59 |
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| 93 | 93 | | (B) A biological product license holder, which includes any of the 60 |
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| 94 | 94 | | following: 61 |
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| 95 | 95 | | (i) The holder of an approved biological product license application 62 |
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| 96 | 96 | | for a biological drug product under subsection (a) of section 351 of the 63 |
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| 97 | 97 | | Public Health Service Act, 42 USC 262, 64 |
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| 98 | 98 | | (ii) A person owning or controlling enforcement of any patents that 65 |
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| 99 | 99 | | claim the biological product that is the subject of the approved biological 66 |
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| 100 | 100 | | patent license application, or 67 |
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| 101 | 101 | | (iii) The predecessors, subsidiaries, divisions, groups and affiliates 68 |
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| 102 | 102 | | controlled by, controlling or under common control with, any of the 69 |
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| 103 | 103 | | entities described in this subparagraph or subparagraph (A) of this 70 |
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| 104 | 104 | | subdivision, with control to be presumed by direct or indirect share 71 |
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| 105 | 105 | | ownership of fifty per cent or greater, as well as the licensees, licensors, 72 Raised Bill No. 251 |
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| 106 | 106 | | |
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| 107 | 107 | | |
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| 108 | 108 | | |
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| 109 | 109 | | LCO No. 2073 4 of 9 |
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| 110 | 110 | | |
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| 111 | 111 | | successors and assigns of each of those entities. 73 |
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| 112 | 112 | | (11) "Reference drug product" means the product to be manufactured 74 |
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| 113 | 113 | | by the reference drug holder and includes branded drugs of the NDA 75 |
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| 114 | 114 | | holder and the biological drug product of the biological product license 76 |
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| 115 | 115 | | applicant. 77 |
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| 116 | 116 | | (12) "Statutory exclusivity" means those prohibitions on the approval 78 |
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| 117 | 117 | | of drug applications under subsection (c) of section 505, section 527 or 79 |
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| 118 | 118 | | 505A of the Federal Food, Drug, and Cosmetic Act, 21 USC 355, 360cc 80 |
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| 119 | 119 | | and 355a, or on the licensing of biological product applications under 81 |
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| 120 | 120 | | subsection (k) or (m) of section 262 of the Public Health Service Act, 42 82 |
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| 121 | 121 | | USC 262. 83 |
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| 122 | 122 | | Sec. 2. (NEW) (Effective October 1, 2020) (a) (1) Except as provided in 84 |
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| 123 | 123 | | subdivision (3) of this subsection, an agreement resolving or settling, on 85 |
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| 124 | 124 | | a final or interim basis, a patent infringement claim, shall be presumed 86 |
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| 125 | 125 | | to have anticompetitive effects and shall be a violation of this section if 87 |
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| 126 | 126 | | both of the following apply: 88 |
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| 127 | 127 | | (A) A nonreference drug filer receives anything of value from 89 |
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| 128 | 128 | | another company asserting patent infringement, including, but not 90 |
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| 129 | 129 | | limited to, an exclusive license or a promise that the brand company will 91 |
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| 130 | 130 | | not launch an authorized generic version of its brand drug; and 92 |
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| 131 | 131 | | (B) The nonreference drug filer agrees to limit or forego research, 93 |
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| 132 | 132 | | development, manufacturing, marketing or sales of the nonreference 94 |
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| 133 | 133 | | drug filer's product for any period of time. 95 |
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| 134 | 134 | | (2) As used in subparagraph (A) of subdivision (1) of this subsection, 96 |
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| 135 | 135 | | "anything of value" does not include a settlement of a patent 97 |
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| 136 | 136 | | infringement claim in which the consideration granted by the brand or 98 |
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| 137 | 137 | | reference drug filer to the nonreference drug filer as part of the 99 |
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| 138 | 138 | | resolution or settlement consists of one or more of the following: 100 |
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| 139 | 139 | | (A) The right to market the competing product in the United States 101 |
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| 140 | 140 | | before the expiration of either: 102 Raised Bill No. 251 |
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| 141 | 141 | | |
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| 142 | 142 | | |
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| 143 | 143 | | |
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| 144 | 144 | | LCO No. 2073 5 of 9 |
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| 145 | 145 | | |
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| 146 | 146 | | (i) A patent that is the basis for the patent infringement claim, or 103 |
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| 147 | 147 | | (ii) A patent right or other statutory exclusivity that would prevent 104 |
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| 148 | 148 | | the marketing of the drug, 105 |
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| 149 | 149 | | (B) A covenant not to sue on a claim that the nonreference drug 106 |
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| 150 | 150 | | product infringes a United States patent; 107 |
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| 151 | 151 | | (C) Compensation for saved reasonable future litigation expenses of 108 |
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| 152 | 152 | | the reference drug holder but only if both of the following are true: 109 |
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| 153 | 153 | | (i) The total compensation for saved litigation expenses is reflected in 110 |
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| 154 | 154 | | budgets that the reference drug holder documented and adopted at least 111 |
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| 155 | 155 | | six months before the settlement, and 112 |
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| 156 | 156 | | (ii) The compensation does not exceed the lower of the following: 113 |
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| 157 | 157 | | (I) Seven million five hundred thousand dollars, or 114 |
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| 158 | 158 | | (II) Five per cent of the revenue that the nonreference drug holder 115 |
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| 159 | 159 | | projected or forecasted it would receive in the first three years of sales 116 |
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| 160 | 160 | | of its version of the reference drug documented at least twelve months 117 |
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| 161 | 161 | | before the settlement. If no projections or forecasts are available, the 118 |
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| 162 | 162 | | compensation does not exceed two hundred fifty thousand dollars; 119 |
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| 163 | 163 | | (D) An agreement resolving or settling a patent infringement claim 120 |
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| 164 | 164 | | that permits a nonreference drug filer to begin selling, offering for sale 121 |
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| 165 | 165 | | or distributing the nonreference drug product if the reference drug 122 |
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| 166 | 166 | | holder seeks approval to launch, obtains approval to launch or launches 123 |
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| 167 | 167 | | a different dosage, strength or form of the reference drug having the 124 |
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| 168 | 168 | | same active ingredient before the date set by the agreement for entry of 125 |
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| 169 | 169 | | the nonreference drug filer. A different form of the reference drug does 126 |
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| 170 | 170 | | not include an authorized generic version of the reference drug; 127 |
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| 171 | 171 | | (E) An agreement by the reference drug holder not to interfere with 128 |
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| 172 | 172 | | the nonreference drug filer's ability to secure and maintain regulatory 129 |
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| 173 | 173 | | approval to market the nonreference drug product or an agreement to 130 |
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| 174 | 174 | | facilitate the nonreference drug filer's ability to secure and maintain 131 Raised Bill No. 251 |
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| 175 | 175 | | |
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| 176 | 176 | | |
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| 177 | 177 | | |
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| 178 | 178 | | LCO No. 2073 6 of 9 |
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| 179 | 179 | | |
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| 180 | 180 | | regulatory approval to market the nonreference drug product; or 132 |
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| 181 | 181 | | (F) An agreement resolving a patent infringement claim in which the 133 |
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| 182 | 182 | | reference drug holder forgives the potential damages accrued by a 134 |
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| 183 | 183 | | nonreference drug holder for an at-risk launch of the nonreference drug 135 |
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| 184 | 184 | | product that is the subject of that claim. 136 |
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| 185 | 185 | | (3) Parties to an agreement are not in violation of subdivision (1) of 137 |
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| 186 | 186 | | this subsection if they can demonstrate by a preponderance of the 138 |
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| 187 | 187 | | evidence that either of the following are met: 139 |
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| 188 | 188 | | (A) The value received by the nonreference drug filer described in 140 |
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| 189 | 189 | | subparagraph (A) of subdivision (1) of this subsection is a fair and 141 |
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| 190 | 190 | | reasonable compensation solely for other goods or services that the 142 |
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| 191 | 191 | | nonreference drug filer has promised to provide, or 143 |
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| 192 | 192 | | (B) The agreement has directly generated procompetitive benefits 144 |
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| 193 | 193 | | and the procompetitive benefits of the agreement outweigh the 145 |
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| 194 | 194 | | anticompetitive effects of the agreement. 146 |
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| 195 | 195 | | (b) In determining whether the parties to the agreement have met 147 |
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| 196 | 196 | | their burden under subdivision (3) of subsection (a) of this section, the 148 |
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| 197 | 197 | | factfinder shall not presume any of the following: 149 |
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| 198 | 198 | | (1) That entry into the marketplace could not have occurred until the 150 |
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| 199 | 199 | | expiration of the relevant patent exclusivity or that the agreement's 151 |
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| 200 | 200 | | provision for entry of the nonreference drug product before the 152 |
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| 201 | 201 | | expiration of any patent exclusivity means that the agreement is 153 |
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| 202 | 202 | | procompetitive within the meaning of subparagraph (B) of subdivision 154 |
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| 203 | 203 | | (3) of subsection (a) of this section, 155 |
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| 204 | 204 | | (2) That any patent is enforceable and infringed by the nonreference 156 |
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| 205 | 205 | | drug filer in the absence of a final adjudication binding on the filer of 157 |
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| 206 | 206 | | those issues, 158 |
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| 207 | 207 | | (3) That the agreement caused no delay in entry of the nonreference 159 |
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| 208 | 208 | | drug filer's drug product because of the lack of federal Food and Drug 160 |
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| 209 | 209 | | Administration approval of that or of another nonreference drug 161 Raised Bill No. 251 |
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| 210 | 210 | | |
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| 211 | 211 | | |
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| 212 | 212 | | |
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| 213 | 213 | | LCO No. 2073 7 of 9 |
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| 214 | 214 | | |
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| 215 | 215 | | product, or 162 |
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| 216 | 216 | | (4) That the agreement caused no harm or delay due to the possibility 163 |
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| 217 | 217 | | that the nonreference drug filer's drug product might infringe some 164 |
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| 218 | 218 | | patent that has not been asserted against the nonreference drug filer or 165 |
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| 219 | 219 | | that is not subject to a final and binding adjudication on that filer as to 166 |
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| 220 | 220 | | the patent's scope, enforceability and infringement. 167 |
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| 221 | 221 | | This subsection shall not be construed to preclude a party from 168 |
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| 222 | 222 | | introducing evidence regarding subdivisions (1) to (4), inclusive, of this 169 |
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| 223 | 223 | | subsection and shall not be construed to preclude the factfinder from 170 |
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| 224 | 224 | | making a determination regarding said subdivisions based on the full 171 |
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| 225 | 225 | | scope of the evidence. 172 |
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| 226 | 226 | | (c) In determining whether the parties to the agreement have met 173 |
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| 227 | 227 | | their burden under subdivision (3) of subsection (a) of this section, the 174 |
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| 228 | 228 | | factfinder shall presume that the relevant product market is that market 175 |
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| 229 | 229 | | consisting of the brand or reference drug of the company alleging patent 176 |
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| 230 | 230 | | infringement and the drug product of the nonreference company 177 |
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| 231 | 231 | | accused of infringement and any other biological product that is 178 |
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| 232 | 232 | | licensed as biosimilar or is an AB-rated generic to the reference product. 179 |
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| 233 | 233 | | (d) (1) The provisions of this section shall not modify, impair, limit or 180 |
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| 234 | 234 | | supersede the right of any drug company applicant to assert claims or 181 |
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| 235 | 235 | | counterclaims against any person under the antitrust laws or other laws 182 |
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| 236 | 236 | | relating to unfair competition of the federal antitrust law or state law. 183 |
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| 237 | 237 | | (2) If any provision of this section, an amendment made to this 184 |
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| 238 | 238 | | section or the application of any provision or amendment to any person 185 |
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| 239 | 239 | | or circumstance is held to be unconstitutional, the remainder of this 186 |
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| 240 | 240 | | section, the amendments made to this section and the application of the 187 |
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| 241 | 241 | | provisions of this section or amendments to any person or circumstance 188 |
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| 242 | 242 | | shall not be affected. 189 |
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| 243 | 243 | | (e) (1) (A) Each person that violates or assists in the violation of this 190 |
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| 244 | 244 | | section shall forfeit and pay to the state a civil penalty sufficient to deter 191 |
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| 245 | 245 | | violations of this section, as follows: 192 Raised Bill No. 251 |
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| 246 | 246 | | |
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| 247 | 247 | | |
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| 248 | 248 | | |
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| 249 | 249 | | LCO No. 2073 8 of 9 |
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| 250 | 250 | | |
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| 251 | 251 | | (i) If the person who violated this section received any value due to 193 |
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| 252 | 252 | | that violation, an amount up to three times the value received by the 194 |
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| 253 | 253 | | party that is reasonably attributable to the violation of this section, or 195 |
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| 254 | 254 | | twenty million dollars, whichever is greater. 196 |
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| 255 | 255 | | (ii) If the violator has not received anything of value as described in 197 |
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| 256 | 256 | | subparagraph (A)(i), an amount up to three times the value given to 198 |
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| 257 | 257 | | other parties to the agreement reasonably attributable to the violation of 199 |
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| 258 | 258 | | this section, or twenty million dollars, whichever is greater. 200 |
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| 259 | 259 | | (iii) For purposes of this subdivision, "reasonably attributable to the 201 |
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| 260 | 260 | | violation" shall be determined by the state's share of the market for the 202 |
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| 261 | 261 | | brand drug at issue in the agreement. 203 |
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| 262 | 262 | | (B) Any penalty described in subparagraph (A) of this subdivision 204 |
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| 263 | 263 | | shall accrue only to the state and shall be recovered in a civil action 205 |
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| 264 | 264 | | brought by the Attorney General against any party to an agreement that 206 |
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| 265 | 265 | | violates this section. 207 |
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| 266 | 266 | | (2) Each party that violates or assists in the violation of this section 208 |
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| 267 | 267 | | shall be liable for any damages, penalties, costs, fees, injunctions, or 209 |
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| 268 | 268 | | other remedies that may be just and reasonable, as determined by the 210 |
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| 269 | 269 | | court. 211 |
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| 270 | 270 | | (3) If the state is awarded penalties under subparagraph (A) of 212 |
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| 271 | 271 | | subdivision (1) of this subsection, it may not recover penalties pursuant 213 |
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| 272 | 272 | | to subdivision (2) of this subsection. This section shall not be construed 214 |
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| 273 | 273 | | to foreclose the state's ability to claim any relief or damages available in 215 |
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| 274 | 274 | | subdivision (2) of this subsection, other than those that are penalties. 216 |
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| 275 | 275 | | (4) An action to enforce a cause of action for a violation of this section 217 |
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| 276 | 276 | | shall be commenced within four years after the cause of action accrued. 218 |
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| 277 | 277 | | This act shall take effect as follows and shall amend the following |
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| 278 | 278 | | sections: |
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| 279 | 279 | | |
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| 280 | 280 | | Section 1 October 1, 2020 New section |
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| 281 | 281 | | Sec. 2 October 1, 2020 New section Raised Bill No. 251 |
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| 282 | 282 | | |
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| 283 | 283 | | |
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| 284 | 284 | | |
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| 285 | 285 | | LCO No. 2073 9 of 9 |
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| 286 | 286 | | |
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| 287 | 287 | | |
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| 288 | 288 | | Statement of Purpose: |
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| 289 | 289 | | To preserve consumer access to affordable generic drugs. |
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| 290 | 290 | | [Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except |
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| 291 | 291 | | that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not |
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| 292 | 292 | | underlined.] |
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| 293 | 293 | | |
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