Full Circle: Rush Bill Would Make Most Patent Settlement Agreements Unlawful

By Kurt R. Karst –      

Last week, Representative Bobby Rush (D-IL) announced the introduction of H.R. 3995, the Protecting Consumer Access to Generic Drugs Act of 2012.  The bill is the latest piece of legislation that attempts to stymie so-called pay-for-delay patent settlement agreements.  In January 2011, Senator Herb Kohl (D-WI) introduced S. 27, the Preserve Access to Affordable Generics Act (see our previous post here), and in November 2011, a group of bi-partisan Senators introduced S.1882, the Fair And Immediate Release of Generic Drugs Act, or the “FAIR GENERxICS Act” (see our previous post here), which also seeks to pull 180-day exclusivity into the mix by making some significant changes to the FDC Act’s exclusivity provisions.

The latest bill – H.R. 3995 – is different than the currently pending legislation, but harkens back to an older version of the Preserve Access to Affordable Generics Act introduced as S. 369 in February 2009, both in terms of substance and length.  Gone from new legislation is the controversial presumption that an agreement, if challenged by the Federal Trade Commission, is anticompetitive and unlawful unless it can be demonstrated by clear and convincing evidence that the procompetitive benefits of the agreement outweigh the anticompetitive effects of the agreement.  Instead, the Protecting Consumer Access to Generic Drugs Act of 2012 simply says that:

It shall be unlawful for any person to directly or indirectly be a party to any agreement resolving or settling a patent infringement claim in which – (1) an ANDA filer receives anything of value; and (2) the ANDA filer agrees not to research, develop, manufacture, market, or sell, for any period of time, the drug that is to be manufactured under the ANDA involved and is the subject of the patent infringement claim.

There are, of course, some exceptions.  For example, the bill would not prohibit agreements in which the value received by the ANDA sponsor includes no more than the right to market the drug product before the expiration of certain patents and non-patent marketing exclusivities.  The FTC may also promulgate regulations to further implement the exceptions included in H.R. 3995.

As in previous versions of legislation addressing patent settlement agreements, H.R. 3995 would amend the 180-day exclusivity forfeiture provision at FDC Act § 505(j)(5)(D)(i)(V) (the so-called “Collusive Agreement Forfeiture Provision”) to make a violation of the Protecting Consumer Access to Generic Drugs Act of 2012 a forfeiture-triggering event. 

H.R. 3995 has been referred to the House Judiciary and Energy and Commerce Committees.  There, it will join a growing number of FDA-related bills that have recently been introduced in the current wave of FDA legislation as folks gear up for user fee creation and reauthorization – see our Legislation Tracker.