House Energy & Commerce Committee Reports Health Care Reform Bill with FOB and “Pay-for-Delay” Provisions

By Kurt R. Karst –      

Last Friday, the House Energy and Commerce Committee favorably reported its version of “America’s Affordable Health Choices Act” (H.R. 3200) by a 31-28 vote after adopting several amendments.  A copy of the bill and amendments are available here.  Importantly, the committee agreed to amendments sponsored by Representatives Anna Eshoo (D-CA) (by a 47-11 vote) and Bobby Rush (D-IL) (by voice vote) that would create a Follow-On Biologics (“FOB”) approval pathway and that would prohibit so-called “pay-for-delay” or “reverse payment” settlements between generic and brand-name drug companies, respectively. 

The Eshoo Amendment would amend the Public Health Service Act to create a pathway for the approval of biosimilars (i.e., FOBs), including provisions to resolve patent disputes.  The amendment incorporates many of the principles in Rep. Eshoo’s “Pathway for Biosimilars Act” (H.R. 1548) introduced earlier this year, as well as those in FOB legislation passed in mid-July by the U.S. Senate Health, Education, Labor, and Pensions Committee (see our previous post here). 

One important difference between H.R. 1548 and the Eshoo Amendment is that whereas H.R. 1548 would provide for up to 14.5 years of exclusivity for a new biological product, the Eshoo Amendment to H.R. 3200 would provide for up to 12.5 years of exclusivity, composed of an initial 12-year exclusivity period that may be extended by 6 months of pediatric exclusivity.  In addition, the 12-year exclusivity period would not be available with respect to the approval of “a supplement for the biological product that is the reference product” or “a subsequent application filed by the same sponsor or manufacturer of the biological product that is the reference product” for certain changes or modifications.  Another difference is that the Eshoo Amendment does not require FDA to issue guidance before reviewing or acting on a FOB application.  H.R. 1548 included requirements on FDA guidance before FOB submissions and approvals could be made.

Biotechnology Industry Organization (“BIO”) President and CEO Jim Greenwood said in a press release that the amendment “strikes the appropriate balance among ensuring patient safety, expanding competition, reducing costs and providing necessary and fair incentives that will provide for continued biomedical innovation.”  PhRMA's press release is avaiable here, and GPhA's press release is available here. 

The Rush Amendment would amend the FDC Act to add section 505(w) – “Protecting Consumer Access to Generic Drugs” – to, among other things, make it unlawful for any person from being a party to any agreement resolving or settling a patent infringement claim in which an ANDA applicant receives anything of value, and the ANDA applicant agrees not to research, develop, manufacture, market or sell the generic drug that is the subject of a patent infringement claim.  The Rush Amendment is similar legislation sponsored by Rep. Rush earlier this year – the “Protecting Consumer Access to Generic Drugs Act of 2009” (H.R. 1706).  One notable difference is that while H.R. 1706 would amend the FDC Act to add new 180-day exclusivity forfeiture provisions with respect to settlement agreements, the Rush Amendment to H.R. 3200 does not include such provisions. 

The FTC has urged the passage of legislation prohibiting “reverse payment” settlement agreements and recently stated that such agreements are “presumptively illegal” (see our recent post here).  FTC Chairman Jon Liebowitz commended the House Energy and Commerce Committee for adopting the Rush Amendment.