S.1096 - Preserve Access to Affordable Generics and Biosimilars Act (119th Congress)
Summary
S.1096, the "Preserve Access to Affordable Generics and Biosimilars Act," aims to prevent brand-name drug companies from compensating generic drug companies to delay the market entry of generic drugs and biosimilars. This bill targets "reverse payment" settlement agreements, which Congress finds subvert the intent of the Drug Price Competition and Patent Term Restoration Act of 1984 and the Biologics Price Competition and Innovation Act of 2010.
The bill amends the Federal Trade Commission Act to prohibit agreements resolving patent claims that have anticompetitive effects. It establishes a presumption that such agreements are anticompetitive if the generic or biosimilar applicant receives anything of value and agrees to limit their market activities.
Furthermore, the bill includes provisions for civil penalties, certification of agreements, and a statute of limitations for enforcement, enhancing the FTC's litigation authority and requiring a report on additional exclusions.
Expected Effects
The primary effect of this bill would be to lower prescription drug costs for consumers and the government by promoting competition from generic and biosimilar drugs. It aims to curtail practices that artificially extend the market exclusivity of brand-name drugs.
This will likely lead to more generic and biosimilar drugs entering the market sooner, increasing access to more affordable medications. The bill also strengthens the FTC's ability to challenge anticompetitive agreements in the pharmaceutical industry.
Potential Benefits
- Lower Drug Costs: Increased availability of generic and biosimilar drugs will drive down prices, making medications more affordable for individuals and families.
- Increased Competition: By preventing anti-competitive agreements, the bill fosters a more competitive pharmaceutical market.
- Reduced Healthcare Spending: Lower drug costs will reduce overall healthcare spending for both consumers and the government.
- Greater Access to Medications: More affordable drugs will improve access to necessary treatments, especially for vulnerable populations.
- Innovation Incentives: By clarifying the rules around patent settlements, the bill may encourage more genuine innovation rather than strategic maneuvers to extend market exclusivity.
Potential Disadvantages
- Potential for Increased Litigation: The bill's provisions could lead to more litigation as companies test the boundaries of what constitutes an anti-competitive agreement.
- Unintended Consequences: The complexity of patent law and pharmaceutical markets means that the bill could have unintended consequences that are difficult to predict.
- Reduced Investment in Innovation: Some argue that limiting the ability of brand-name companies to protect their patents could reduce their incentive to invest in research and development of new drugs, although the bill aims to strike a balance.
- Implementation Challenges: The FTC may face challenges in enforcing the bill's provisions, particularly in determining whether an agreement has anti-competitive effects.
- Possible Delays in Drug Availability: While the goal is to speed up generic entry, litigation and regulatory hurdles could still cause delays.
Constitutional Alignment
The bill aligns with the Commerce Clause (Article I, Section 8, Clause 3) of the U.S. Constitution, which grants Congress the power to regulate interstate commerce. By addressing anti-competitive practices in the pharmaceutical industry, the bill aims to promote fair competition and lower drug prices, which directly impacts interstate commerce.
Additionally, the bill's focus on consumer welfare aligns with the general welfare clause of the Constitution's preamble, which seeks to "promote the general Welfare." The bill does not appear to infringe on any specific constitutional rights or freedoms.
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).