II
119THCONGRESS
1
STSESSION S. 1096
To prohibit brand name drug companies from compensating generic drug
companies to delay the entry of a generic drug into the market, and
to prohibit biological product manufacturers from compensating bio-
similar and interchangeable companies to delay the entry of biosimilar
biological products and interchangeable biological products.
IN THE SENATE OF THE UNITED STATES
MARCH24, 2025
Ms. K
LOBUCHAR(for herself, Mr. GRASSLEY, Mr. DURBIN, Mr. CRAMER, Mr.
B
LUMENTHAL, Ms. ERNST, Mr. WELCH, Mr. KELLY, and Mr. BOOKER)
introduced the following bill; which was read twice and referred to the
Committee on the Judiciary
A BILL
To prohibit brand name drug companies from compensating
generic drug companies to delay the entry of a generic
drug into the market, and to prohibit biological product
manufacturers from compensating biosimilar and inter-
changeable companies to delay the entry of biosimilar
biological products and interchangeable biological prod-
ucts.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
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SECTION 1. SHORT TITLE. 1
This Act may be cited as the ‘‘Preserve Access to Af-2
fordable Generics and Biosimilars Act’’. 3
SEC. 2. CONGRESSIONAL FINDINGS AND DECLARATION OF 4
PURPOSES. 5
(a) F
INDINGS.—Congress finds the following: 6
(1) In 1984, the Drug Price Competition and 7
Patent Term Restoration Act (Public Law 98–417) 8
(referred to in this Act as the ‘‘1984 Act’’), was en-9
acted with the intent of facilitating the early entry 10
of generic drugs while preserving incentives for inno-11
vation. 12
(2) Prescription drugs make up approximately 13
11 percent of the national health care spending. 14
(3) Initially, the 1984 Act was successful in fa-15
cilitating generic competition to the benefit of con-16
sumers and health care payers. Although 91 percent 17
of all prescriptions dispensed in the United States 18
are generic drugs, they account for only 18 percent 19
of all expenditures. 20
(4) Generic drugs cost substantially less than 21
brand name drugs, with discounts off the brand 22
price averaging 80 to 85 percent. 23
(5) Federal dollars currently account for over 24
40 percent of the $449,700,000,000 spent on retail 25
prescription drugs annually. 26
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(6)(A) In recent years, the intent of the 1984 1
Act has been subverted by certain settlement agree-2
ments in which brand name companies transfer 3
value to their potential generic competitors to settle 4
claims that the generic company is infringing the 5
branded company’s patents. 6
(B) These ‘‘reverse payment’’ settlement agree-7
ments— 8
(i) allow a branded company to share its 9
monopoly profits with the generic company as a 10
way to protect the branded company’s monop-11
oly; and 12
(ii) have unduly delayed the marketing of 13
low-cost generic drugs contrary to free competi-14
tion, the interests of consumers, and the prin-15
ciples underlying antitrust law. 16
(C) Because of the price disparity between 17
brand name and generic drugs, such agreements are 18
more profitable for both the brand and generic man-19
ufacturers than competition and will become increas-20
ingly common unless prohibited. 21
(D) These agreements result in consumers los-22
ing the benefits that the 1984 Act was intended to 23
provide. 24
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(7) In 2010, the Biologics Price Competition 1
and Innovation Act (Public Law 111–148) (referred 2
to in this Act as the ‘‘BPCIA’’), was enacted with 3
the intent of facilitating the early entry of biosimilar 4
and interchangeable follow-on versions of branded 5
biological products while preserving incentives for in-6
novation. 7
(8) Biological drugs play an important role in 8
treating many serious illnesses, from cancers to ge-9
netic disorders. They are also expensive, rep-10
resenting more than half of all prescription drug 11
spending. 12
(9) Competition from biosimilar and inter-13
changeable biological products promises to lower 14
drug costs and increase patient access to biological 15
medicines. But ‘‘reverse payment’’ settlement agree-16
ments also threaten to delay the entry of biosimilar 17
and interchangeable biological products, which would 18
undermine the goals of BPCIA. 19
(b) P
URPOSES.—The purposes of this Act are— 20
(1) to enhance competition in the pharma-21
ceutical market by stopping anticompetitive agree-22
ments between brand name and generic drug and 23
biosimilar biological product manufacturers that 24
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limit, delay, or otherwise prevent competition from 1
generic drugs and biosimilar biological products; and 2
(2) to support the purpose and intent of anti-3
trust law by prohibiting anticompetitive practices in 4
the pharmaceutical industry that harm consumers. 5
SEC. 3. UNLAWFUL COMPENSATION FOR DELAY. 6
(a) I
NGENERAL.—The Federal Trade Commission 7
Act (15 U.S.C. 44 et seq.) is amended by inserting after 8
section 26 (15 U.S.C. 57c–2) the following: 9
‘‘SEC. 27. PRESERVING ACCESS TO AFFORDABLE GENERICS 10
AND BIOSIMILARS. 11
‘‘(a) P
ROHIBITION.— 12
‘‘(1) I
N GENERAL.—It shall be a violation of 13
this section for a party to enter into, or be a partici-14
pant to, an agreement, resolving or settling, on a 15
final or interim basis, a patent claim in connection 16
with the sale of a drug product or biological product, 17
that has anticompetitive effects. 18
‘‘(2) T
REATMENT.—A violation of this section 19
shall be treated as an unfair method of competition 20
in violation of section 5(a)(1). 21
‘‘(3) P
RESUMPTION.— 22
‘‘(A) I
N GENERAL.—Subject to subpara-23
graph (B), an agreement described in para-24
graph (1) shall be presumed to have anti-25
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competitive effects for purposes of such para-1
graph if— 2
‘‘(i) an ANDA filer or a biosimilar bi-3
ological product application filer receives 4
anything of value, including an exclusive li-5
cense; and 6
‘‘(ii) the ANDA filer or biosimilar bio-7
logical product application filer agrees to 8
limit or forgo research, development, man-9
ufacturing, marketing, or sales of the 10
ANDA product or biosimilar biological 11
product, as applicable, for any period of 12
time. 13
‘‘(B) E
XCEPTION.—Subparagraph (A) 14
shall not apply if the parties to such agreement 15
demonstrate by a preponderance of the evidence 16
that— 17
‘‘(i) the value described in subpara-18
graph (A)(i) is compensation solely for 19
other goods or services that the ANDA 20
filer or biosimilar biological product appli-21
cation filer has promised to provide; or 22
‘‘(ii) the procompetitive benefits of the 23
transfer of value described in subpara-24
graph (A)(i) and the agreement by the 25
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ANDA filer or biosimilar biological product 1
application filer to limit or forgo research, 2
development, manufacturing, marketing, or 3
sales of the ANDA product or biosimilar 4
biological product described in subpara-5
graph (A)(ii) outweigh the anticompetitive 6
effects of the transfer of value described in 7
subparagraph (A)(i) and the agreement by 8
the ANDA filer or biosimilar biological 9
product application filer to limit or forgo 10
research, development, manufacturing, 11
marketing, or sales of the ANDA product 12
or biosimilar biological product described 13
in subparagraph (A)(ii). 14
‘‘(4) C
IVIL ACTION.—In addition to any pro-15
ceeding under section 5, if the Commission has rea-16
son to believe that a party has violated this section, 17
the Commission may bring, in its own name by any 18
of its attorneys designated by it for such purpose, a 19
civil action against the party in a district court of 20
the United States to seek to recover any of the rem-21
edies of civil penalty, mandatory injunctions, and 22
such other and further equitable relief as the court 23
deems appropriate. 24
‘‘(5) C
IVIL PENALTY.— 25
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‘‘(A) IN GENERAL.—Each party that vio-1
lates or assists in the violation of paragraph (1) 2
shall forfeit and pay to the United States a civil 3
penalty sufficient to deter violations of para-4
graph (1), but in no event greater than 3 times 5
the value received by the party that is reason-6
ably attributable to the violation of paragraph 7
(1). If no such value has been received by the 8
NDA holder, the biological product license hold-9
er, the ANDA filer, or the biosimilar biological 10
product application filer, the penalty to the 11
NDA holder, the biological product license hold-12
er, the ANDA filer, or the biosimilar biological 13
product application filer shall be sufficient to 14
deter violations, but in no event shall be greater 15
than 3 times the value given to an ANDA filer 16
or biosimilar biological product application filer 17
reasonably attributable to the violation of this 18
section. 19
‘‘(B) A
MOUNT.—In determining the 20
amount of the civil penalty described in sub-21
paragraph (A), the court shall take into ac-22
count— 23
‘‘(i) the nature, circumstances, extent, 24
and gravity of the violation; 25
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‘‘(ii) with respect to the violator, the 1
degree of culpability, any history of prior 2
such conduct, including other agreements 3
resolving or settling a patent infringement 4
claim, the ability to pay, any effect on the 5
ability to continue doing business, profits 6
earned by the NDA holder, the biological 7
product license holder, the ANDA filer, or 8
the biosimilar biological product applica-9
tion filer, compensation received by the 10
ANDA filer or biosimilar biological product 11
application filer, and the amount of com-12
merce affected; and 13
‘‘(iii) other matters that justice re-14
quires. 15
‘‘(C) R
EMEDIES IN ADDITION .—Remedies 16
provided in this paragraph are in addition to, 17
and not in lieu of, any other remedy provided 18
by Federal law. Nothing in this section shall be 19
construed to limit any authority of the Commis-20
sion under any other provision of law. 21
‘‘(b) E
XCLUSIONS.—Nothing in this section shall pro-22
hibit a resolution or settlement of a patent infringement 23
claim in which the consideration that the ANDA filer or 24
biosimilar biological product application filer, respectively, 25
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receives as part of the resolution or settlement includes 1
only one or more of the following: 2
‘‘(1) The right to market and secure final ap-3
proval in the United States for the ANDA product 4
or biosimilar biological product at a date, whether 5
certain or contingent, prior to the expiration of— 6
‘‘(A) any patent that is the basis for the 7
patent infringement claim; or 8
‘‘(B) any patent right or other statutory 9
exclusivity that would prevent the marketing of 10
such ANDA product or biosimilar biological 11
product. 12
‘‘(2) A payment for reasonable litigation ex-13
penses not to exceed— 14
‘‘(A) for calendar year 2025, $7,500,000; 15
or 16
‘‘(B) for calendar year 2026 and each sub-17
sequent calendar year, the amount determined 18
for the preceding calendar year adjusted to re-19
flect the percentage increase (if any) in the 20
Producer Price Index for Legal Services pub-21
lished by the Bureau of Labor Statistics of the 22
Department of Labor for the most recent cal-23
endar year. 24
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‘‘(3) A covenant not to sue on any claim that 1
the ANDA product or biosimilar biological product 2
infringes a United States patent. 3
‘‘(c) A
NTITRUSTLAWS.—Except to the extent this 4
section establishes an additional basis of liability, nothing 5
in this section shall modify, impair, limit, or supersede the 6
applicability of the antitrust laws as defined in subsection 7
(a) of the first section of the Clayton Act (15 U.S.C. 8
12(a)), and of section 5 of this Act to the extent that sec-9
tion 5 applies to unfair methods of competition. Nothing 10
in this section shall modify, impair, limit, or supersede the 11
right of an ANDA filer or biosimilar biological product 12
application filer to assert claims or counterclaims against 13
any person, under the antitrust laws or other laws relating 14
to unfair competition. 15
‘‘(d) D
EFINITIONS.—In this section: 16
‘‘(1) A
GREEMENT.—The term ‘agreement’ 17
means anything that would constitute an agreement 18
under section 1 of the Sherman Act (15 U.S.C. 1) 19
or section 5 of this Act. 20
‘‘(2) A
GREEMENT RESOLVING OR SETTLING A 21
PATENT INFRINGEMENT CLAIM .—The term ‘agree-22
ment resolving or settling a patent infringement 23
claim’ includes any agreement that is entered into 24
within 30 days of the resolution or the settlement of 25
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the claim, or any other agreement that is contingent 1
upon, provides a contingent condition for, or is oth-2
erwise related to the resolution or settlement of the 3
claim. 4
‘‘(3) ANDA.—The term ‘ANDA’ means an ab-5
breviated new drug application filed under section 6
505(j) of the Federal Food, Drug, and Cosmetic Act 7
(21 U.S.C. 355(j)) or a new drug application sub-8
mitted pursuant to section 505(b)(2) of the Federal 9
Food, Drug, and Cosmetic Act (21 U.S.C. 10
355(b)(2)). 11
‘‘(4) ANDA
FILER.—The term ‘ANDA filer’ 12
means a party that owns or controls an ANDA filed 13
with the Secretary of Health and Human Services or 14
has the exclusive rights under such ANDA to dis-15
tribute the ANDA product. 16
‘‘(5) ANDA
PRODUCT.—The term ‘ANDA 17
product’ means the product to be manufactured 18
under the ANDA that is the subject of the patent 19
infringement claim. 20
‘‘(6) B
IOLOGICAL PRODUCT .—The term ‘bio-21
logical product’ has the meaning given such term in 22
section 351(i)(1) of the Public Health Service Act 23
(42 U.S.C. 262(i)(1)). 24
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‘‘(7) BIOLOGICAL PRODUCT LICENSE APPLICA -1
TION.—The term ‘biological product license applica-2
tion’ means an application under section 351(a) of 3
the Public Health Service Act (42 U.S.C. 262(a)). 4
‘‘(8) B
IOLOGICAL PRODUCT LICENSE HOLD -5
ER.—The term ‘biological product license holder’ 6
means— 7
‘‘(A) the holder of an approved biological 8
product license application for a biological prod-9
uct; 10
‘‘(B) a person owning or controlling en-11
forcement of any patents that claim the biologi-12
cal product that is the subject of such approved 13
application; or 14
‘‘(C) the predecessors, subsidiaries, divi-15
sions, groups, and affiliates controlled by, con-16
trolling, or under common control with any of 17
the entities described in subparagraphs (A) and 18
(B) (such control to be presumed by direct or 19
indirect share ownership of 50 percent or great-20
er), as well as the licensees, licensors, succes-21
sors, and assigns of each of the entities. 22
‘‘(9) B
IOSIMILAR BIOLOGICAL PRODUCT .—The 23
term ‘biosimilar biological product’ means the prod-24
uct to be manufactured under the biosimilar biologi-25
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cal product application that is the subject of the pat-1
ent infringement claim. 2
‘‘(10) B
IOSIMILAR BIOLOGICAL PRODUCT APPLI -3
CATION.—The term ‘biosimilar biological product ap-4
plication’ means an application under section 351(k) 5
of the Public Health Service Act (42 U.S.C. 262(k)) 6
for licensure of a biological product as biosimilar to, 7
or interchangeable with, a reference product. 8
‘‘(11) B
IOSIMILAR BIOLOGICAL PRODUCT APPLI -9
CATION FILER.—The term ‘biosimilar biological 10
product application filer’ means a party that owns or 11
controls a biosimilar biological product application 12
filed with the Secretary of Health and Human Serv-13
ices or has the exclusive rights under such applica-14
tion to distribute the biosimilar biological product. 15
‘‘(12) D
RUG PRODUCT.—The term ‘drug prod-16
uct’ has the meaning given such term in section 17
314.3(b) of title 21, Code of Federal Regulations (or 18
any successor regulation). 19
‘‘(13) M
ARKET.—The term ‘market’ means the 20
promotion, offering for sale, selling, or distribution 21
of a drug product. 22
‘‘(14) NDA.—The term ‘NDA’ means a new 23
drug application filed under section 505(b) of the 24
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Federal Food, Drug, and Cosmetic Act (21 U.S.C. 1
355(b)). 2
‘‘(15) NDA
HOLDER.—The term ‘NDA holder’ 3
means— 4
‘‘(A) the holder of an approved NDA appli-5
cation for a drug product; 6
‘‘(B) a person owning or controlling en-7
forcement of the patent listed in the Approved 8
Drug Products With Therapeutic Equivalence 9
Evaluations (commonly known as the ‘FDA Or-10
ange Book’) in connection with the NDA; or 11
‘‘(C) the predecessors, subsidiaries, divi-12
sions, groups, and affiliates controlled by, con-13
trolling, or under common control with any of 14
the entities described in subparagraphs (A) and 15
(B) (such control to be presumed by direct or 16
indirect share ownership of 50 percent or great-17
er), as well as the licensees, licensors, succes-18
sors, and assigns of each of the entities. 19
‘‘(16) P
ARTY.—The term ‘party’ means any 20
person, partnership, corporation, or other legal enti-21
ty. 22
‘‘(17) P
ATENT INFRINGEMENT .—The term 23
‘patent infringement’ means infringement of any 24
patent or of any filed patent application, including 25
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any extension, reissue, renewal, division, continu-1
ation, continuation in part, reexamination, patent 2
term restoration, patents of addition, and extensions 3
thereof. 4
‘‘(18) P
ATENT INFRINGEMENT CLAIM .—The 5
term ‘patent infringement claim’ means any allega-6
tion made to an ANDA filer or biosimilar biological 7
product application filer, whether or not included in 8
a complaint filed with a court of law, that its ANDA 9
or ANDA product, or biosimilar biological product 10
application or biosimilar biological product, may in-11
fringe any patent held by, or exclusively licensed to, 12
the NDA holder or biological product license holder 13
of the drug product or biological product, as applica-14
ble. 15
‘‘(19) S
TATUTORY EXCLUSIVITY .—The term 16
‘statutory exclusivity’ means those prohibitions on 17
the submission or the approval of drug applications 18
under clauses (ii) through (iv) of section 19
505(c)(3)(E), clauses (ii) through (iv) of section 20
505(j)(5)(F), section 527, section 505A, or section 21
505E of the Federal Food, Drug, and Cosmetic Act 22
(21 U.S.C. 355(c)(3)(E), 360cc, 355a, 355f), or on 23
the submission or licensing of biological product ap-24
plications under section 351(k)(7) or paragraph (2) 25
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or (3) of section 351(m) of the Public Health Serv-1
ice Act (42 U.S.C. 262) or under section 527 of the 2
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 3
360cc).’’. 4
(b) E
FFECTIVEDATE.—Section 27 of the Federal 5
Trade Commission Act, as added by this section, shall 6
apply to all agreements described in section 27(a)(1) of 7
that Act entered into on or after the date of enactment 8
of this Act. 9
SEC. 4. CERTIFICATION OF AGREEMENTS. 10
(a) N
OTICE OFALLAGREEMENTS.—Section 1111(7) 11
of the Medicare Prescription Drug, Improvement, and 12
Modernization Act of 2003 (21 U.S.C. 355 note) is 13
amended by inserting ‘‘, or the owner of a patent for which 14
a claim of infringement could reasonably be asserted 15
against any person for making, using, offering to sell, sell-16
ing, or importing into the United States a biological prod-17
uct that is the subject of a biosimilar biological product 18
application’’ before the period at the end. 19
(b) C
ERTIFICATION OFAGREEMENTS.—Section 1112 20
of the Medicare Prescription Drug, Improvement, and 21
Modernization Act of 2003 (21 U.S.C. 355 note) is 22
amended by adding at the end the following: 23
‘‘(d) C
ERTIFICATION.—The Chief Executive Officer 24
or the company official responsible for negotiating any 25
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agreement under subsection (a) or (b) that is required to 1
be filed under subsection (c), within 30 days after such 2
filing, shall execute and file with the Assistant Attorney 3
General and the Commission a certification as follows: ‘I 4
declare that the following is true, correct, and complete 5
to the best of my knowledge: The materials filed with the 6
Federal Trade Commission and the Department of Justice 7
under section 1112 of subtitle B of title XI of the Medi-8
care Prescription Drug, Improvement, and Modernization 9
Act of 2003, with respect to the agreement referenced in 10
this certification— 11
‘‘(1) represent the complete, final, and exclusive 12
agreement between the parties; 13
‘‘(2) include any ancillary agreements that are 14
contingent upon, provide a contingent condition for, 15
or are otherwise related to, the referenced agree-16
ment; and 17
‘‘(3) include written descriptions of any oral 18
agreements, representations, commitments, or prom-19
ises between the parties that are responsive to sub-20
section (a) or (b) of such section 1112 and have not 21
been reduced to writing.’’’. 22
SEC. 5. NOTIFICATION OF AGREEMENTS. 23
Section 1112 of the Medicare Prescription Drug, Im-24
provement, and Modernization Act of 2003 (21 U.S.C. 25
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355 note), as amended by section 4(b), is further amended 1
by adding at the end the following: 2
‘‘(e) R
ULE OFCONSTRUCTION.— 3
‘‘(1) I
N GENERAL.—An agreement that is re-4
quired under subsection (a) or (b) shall include 5
agreements resolving any outstanding disputes, in-6
cluding agreements resolving or settling a Patent 7
Trial and Appeal Board proceeding. 8
‘‘(2) D
EFINITION.—For purposes of subpara-9
graph (A), the term ‘Patent Trial and Appeal Board 10
proceeding’ means a proceeding conducted by the 11
Patent Trial and Appeal Board of the United States 12
Patent and Trademark Office, including an inter 13
partes review instituted under chapter 31 of title 35, 14
United States Code, a post-grant review instituted 15
under chapter 32 of that title (including a pro-16
ceeding instituted pursuant to the transitional pro-17
gram for covered business method patents, as de-18
scribed in section 18 of the Leahy-Smith America 19
Invents Act (35 U.S.C. 321 note)), and a derivation 20
proceeding instituted under section 135 of that 21
title.’’. 22
SEC. 6. FORFEITURE OF 180-DAY EXCLUSIVITY PERIOD. 23
Section 505(j)(5)(D)(i)(V) of the Federal Food, 24
Drug, and Cosmetic Act (21 U.S.C. 355(j)(5)(D)(i)(V)) 25
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is amended by inserting ‘‘section 27 of the Federal Trade 1
Commission Act or’’ after ‘‘that the agreement has vio-2
lated’’. 3
SEC. 7. COMMISSION LITIGATION AUTHORITY. 4
Section 16(a)(2) of the Federal Trade Commission 5
Act (15 U.S.C. 56(a)(2)) is amended— 6
(1) in subparagraph (D), by striking ‘‘or’’ after 7
the semicolon; 8
(2) in subparagraph (E)— 9
(A) by moving the margin 2 ems to the 10
left; and 11
(B) by inserting ‘‘or’’ after the semicolon; 12
and 13
(3) inserting after subparagraph (E) the fol-14
lowing: 15
‘‘(F) under section 27,’’. 16
SEC. 8. REPORT ON ADDITIONAL EXCLUSION. 17
(1) I
N GENERAL.—Not later than 1 year after 18
the date of enactment of this Act, the Federal Trade 19
Commission shall submit to the Committee on the 20
Judiciary of the Senate and the Committee on the 21
Judiciary of the House of Representatives a rec-22
ommendation, and the Commission’s basis for such 23
recommendation, regarding a potential amendment 24
to include in section 27(b) of the Federal Trade 25
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Commission Act (as added by section 3) an addi-1
tional exclusion for consideration granted by an 2
NDA holder to a ANDA filer or by a biological prod-3
uct license holder to a biosimilar biological product 4
application filer as part of the resolution or settle-5
ment, a release, waiver, or limitation of a claim for 6
damages or other monetary relief. 7
(2) D
EFINITIONS.—In this section, the terms 8
‘‘ANDA filer’’, ‘‘biological product license holder’’, 9
‘‘biosimilar biological product application filer’’, and 10
‘‘NDA holder’’ have the meanings given such terms 11
in section 27(d) of the Federal Trade Commission 12
Act (as added by section 3). 13
SEC. 9. STATUTE OF LIMITATIONS. 14
The Federal Trade Commission shall commence any 15
enforcement proceeding described in section 27 of the 16
Federal Trade Commission Act, as added by section 3, not 17
later than 6 years after the date on which the parties to 18
the agreement file the certification under section 1112(d) 19
of the Medicare Prescription Drug Improvement and Mod-20
ernization Act of 2003 (21 U.S.C. 355 note). 21
SEC. 10. SEVERABILITY. 22
If any provision of this Act, an amendment made by 23
this Act, or the application of such provision or amend-24
ment to any person or circumstance is held to be unconsti-25
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tutional, the remainder of this Act, the amendments made 1
by this Act, and the application of the provisions of such 2
Act or amendments to any person or circumstance shall 3
not be affected. 4
Æ
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