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Adds a new subsection (e) to 21 U.S.C. 355 requiring that agreements required under subsections (a) or (b) include resolution of outstanding disputes (including Patent Trial and Appeal Board proceedings) and defining the term "Patent Trial and Appeal Board proceeding."
Adds a new section (section 27) to the Federal Trade Commission Act establishing prohibitions and remedies for agreements resolving or settling patent claims related to drug products and biological products that have anticompetitive effects, including treatment as an unfair method of competition, presumptions, civil actions by the Commission, civil penalties, specified exclusions, and definitions.
Amends paragraph (2) of 15 U.S.C. 56(a) by altering punctuation/formatting in subparagraphs (D) and (E) and inserting a new subparagraph (F) that references 'section 27'.
Amends 21 U.S.C. 355(j)(5)(D)(i)(V) by inserting additional text after the existing provision (the exact inserted text is not included in the provided section excerpt).
Makes it illegal for brand drug or biologic makers to pay potential generic or biosimilar competitors to delay entering the market (so-called “reverse payment” or pay-for-delay settlements), gives the Federal Trade Commission stronger tools to sue for penalties and injunctions, and adds new filing and certification rules to improve transparency. It also requires patent disputes (including PTAB proceedings) to be resolved or addressed in covered settlement agreements and adjusts a drug exclusivity forfeiture rule (text to be inserted). The Act includes a severability clause and deadlines for FTC review and enforcement actions.
If any provision of this Act, any amendment made by this Act, or the application of such provision or amendment to any person or circumstance is held to be unconstitutional, the remainder of this Act, the amendments made by this Act, and the application of the provisions of such Act or amendments to any person or circumstance shall not be affected.
The 1984 Drug Price Competition and Patent Term Restoration Act was enacted to help generics enter the market early while preserving incentives for innovation.
Prescription drugs make up about 11 percent of national health care spending.
The 1984 Act initially succeeded: 91 percent of U.S. prescriptions are generic, but they account for only 18 percent of prescription drug expenditures.
Generic drugs typically cost much less than brand-name drugs, with average discounts of about 80 to 85 percent off brand prices.
Who is affected and how:
Brand-name drug and biologic manufacturers: Face restrictions on settlement payments and other consideration that delay generic/biosimilar entry; will need to change settlement strategies, include patent-dispute resolutions in filed agreements, and comply with new certification requirements. Potential exposure to FTC enforcement actions and civil penalties.
Generic and biosimilar applicants: May gain faster market entry if pay-for-delay deals become harder to structure; however, settlement leverage and permissible forms of compensation will change. They will also be subject to scrutiny of settlement terms and certifications.
Consumers and payers (including Medicare and private health plans): Likely to benefit from increased competition and earlier availability of lower-cost generics and biosimilars over time, which could lower drug prices and reduce federal and private drug spending.
Federal agencies (FTC and DOJ): Will gain clearer authority and more documentary detail to investigate and litigate settlements considered anticompetitive; will incur enforcement and review responsibilities (FTC report within 1 year, enforcement actions within statutory timelines). DOJ’s role in civil antitrust enforcement remains relevant via filings and shared materials.
Patent system participants and PTAB stakeholders: Settlement agreements must address PTAB proceedings; parties may accelerate PTAB resolution or change litigation tactics in district courts vs. PTAB. This could shift how patent validity is litigated or settled.
Industry compliance burden: Companies will face new administrative tasks (timely certifications, assembling related agreements), potential limits on permissible settlement terms, and increased litigation risk from FTC enforcement. Legal and transactional costs may rise in the short run.
Potential benefits and risks:
Budgetary impact:
Read twice and referred to the Committee on the Judiciary.
Introduced March 24, 2025 by Amy Klobuchar · Last progress March 24, 2025
Placed on Senate Legislative Calendar under General Orders. Calendar No. 46.
Committee on the Judiciary. Reported by Senator Grassley with an amendment in the nature of a substitute. Without written report.
Committee on the Judiciary. Ordered to be reported with an amendment in the nature of a substitute favorably.
Read twice and referred to the Committee on the Judiciary.