S.1040 - Drug Competition Enhancement Act (119th Congress)
Summary
The Drug Competition Enhancement Act aims to amend the Federal Trade Commission Act to prohibit 'product hopping,' a practice where drug manufacturers strategically switch to slightly modified versions of their drugs to extend patent protection and hinder generic competition. The bill defines key terms like 'follow-on product,' 'generic drug,' and 'reference product' to clarify the scope of the prohibition. It empowers the Federal Trade Commission (FTC) to take action against manufacturers engaging in product hopping, including instituting proceedings, seeking injunctions, and pursuing equitable remedies like disgorgement and restitution.
Expected Effects
This act will likely increase competition in the pharmaceutical market by preventing manufacturers from using product hopping strategies to maintain monopolies. This could lead to lower drug prices and increased access to medications for consumers. The FTC would gain additional authority to regulate anti-competitive practices in the pharmaceutical industry.
Potential Benefits
- Lower Drug Prices: Increased generic competition should drive down the cost of prescription drugs.
- Increased Access to Medications: More affordable drugs will improve access for individuals and families.
- Reduced Healthcare Costs: Lower drug prices can lead to overall reductions in healthcare spending.
- Innovation in Generics: Encourages generic drug manufacturers to enter the market.
- Fairer Competition: Prevents anti-competitive practices that stifle innovation and inflate prices.
Potential Disadvantages
- Potential for Reduced Innovation in Brand-Name Drugs: Brand-name drug manufacturers might reduce investment in new drug development if their market exclusivity is shortened.
- Legal Challenges: The definitions and enforcement mechanisms could face legal challenges, leading to uncertainty.
- Implementation Costs: The FTC will incur costs in enforcing the new regulations.
- Unintended Consequences: The rules could inadvertently affect legitimate product improvements or modifications.
- Complexity: The definitions of 'hard switch' and 'soft switch' may be difficult to apply in practice.
Constitutional Alignment
The bill aligns with the Commerce Clause (Article I, Section 8, Clause 3) by regulating interstate commerce related to pharmaceutical products. It also aligns with the general welfare clause of the preamble, as it aims to promote the health and well-being of the population by ensuring access to affordable medications. The bill grants additional powers to the FTC, an executive agency, which is consistent with the delegation of authority from Congress.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).