Preserve Access to Affordable Generics and Biosimilars Act
The Preserve Access to Affordable Generics and Biosimilars Act would bar brand-name drug companies from paying or cushioning generic drug makers to delay the introduction of cheaper generics, and would similarly bar biological product manufacturers from compensating biosimilar or interchangeable product applicants to delay biosimilars. The goal is to strengthen competition in the pharmaceutical market, reduce costs for consumers, and align with antitrust principles. The bill would create a new prohibition under the Federal Trade Commission Act, establish a strong enforcement framework with civil penalties, and set up reporting and certification requirements tied to settlements and patent resolutions in both generic and biosimilar contexts. It also clarifies permissible elements of settlements and sets timelines for enforcement. In short, the bill targets “reverse payments” and similar arrangements that can delay cheaper alternatives, aiming to ensure earlier access to affordable generics and biosimilars while preserving incentives for innovation through appropriate safeguards.
Key Points
- 1Prohibition of anticompetitive settlements in drug and biosimilar cases:
- 2- Creates a new FTC prohibition (Section 27) on agreements that resolve or settle patent claims related to drug products or biological products if they have anticompetitive effects and delay entry of generics or biosimilars.
- 3Presumption of anticompetitive effect and limited exceptions:
- 4- Establishes a presumption that such agreements are anticompetitive if the ANDA filer (for generics) or biosimilar applicant filer receives value (including exclusive licenses) and agrees to limit or forgo certain research, development, manufacturing, marketing, or sales.
- 5- Allows an evidence-based exception if the value is for other goods/services or if procompetitive benefits outweigh the anti-competitive effects.
- 6Penalties and enforcement:
- 7- The FTC may bring civil actions for violations, seeking civil penalties and equitable relief.
- 8- Civil penalties can be up to three times the value reasonably attributable to the violation, with factors to consider in setting the amount (gravity, profits, ability to pay, impact on business, etc.).
- 9- Remedies are additive to other federal remedies; the act does not remove other applicable laws.
- 10Exclusions and safe harbors for settlements:
- 11- Settlements may include only certain permitted elements, such as the right to market and obtain final approval before a patent expires, or limits on certain damages or exclusivity.
- 12- Caps on payments for reasonable litigation expenses (starting at $7.5 million in 2025 and adjusted thereafter) and allowances for covenants not to sue.
- 13- Other narrowly defined exclusions to protect legitimate litigation-related costs and rights.
- 14Certification, reporting, and notification requirements:
- 15- Requires certification and disclosure of agreements under Medicare-related procedures (with filing and certification by company officials).
- 16- Mandates reporting to the DOJ and FTC, and inclusion of written descriptions of any oral agreements related to the referred agreements.
- 17- Adds a compliance framework for agreements and requires consideration of ongoing disputes, including Patent Trial and Appeal Board proceedings, in notification.
- 18Statute of limitations and date of effect:
- 19- Enforcement action under the act must be commenced within six years after the parties file the required certification.
- 20- Applies to agreements entered into on or after the date of enactment.
- 21Definitions:
- 22- Provides detailed definitions for terms used throughout the bill, including ANDA, biosimilar, NDA, biological product license holder, ANDA filer, biosimilar biological product application filer, and other related terms to ensure precise scope.