House and Senate Bills Would Require Reporting of Biosimilar Agreements to the DoJ and FTC

Last month, Representatives John Sarbanes (D-MD) and Bill Johnson (R-OH) introduced H.R. 6478, the “Biosimilars Competition Act of 2018.”  The bill would amend the Public Health Service Act (“PHS Act”) to require that certain agreements between biosimilar applicants and reference product sponsors be reported to the Department of Justice (“DoJ”) and to the Federal Trade Commission (“FTC”).  According to Rep. Sarbanes, the bill is intended to address so-called “pay-for-delay” agreements.

Specifically, H.R. 6478 would amend PHS Act § 351(l) to add item “(10)” to require the reporting of any agreement between a biosimilar applicant and a reference product sponsor, or an agreement between two or more biosimilar applicants, regarding the manufacture, marketing, or sale of the biosimilar product(s) for which a 351(k) aBLA was submitted to FDA, or the brand-name reference product. Such agreements also include agreements that are contingent upon, provide a contingent condition for, or that otherwise relate to an agreement regarding the manufacture, marketing, or sale of the biosimilar or reference products. Agreements that solely concern purchase orders for raw material supplies, equipment and facility contracts, employment or consulting contracts, or packaging and labeling contracts would be excluded from reporting under H.R. 6478.

While the House considers H.R. 6478, the United States Senate is considering legislation concerning the reporting of patent settlement agreements involving biosimilars. Specifically, S. 2554, the “Patient Right to Know Drug Prices Act,” would amend the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (“MMA”) – and, in particular, Sections 1111-1118 – to require that certain agreements reached between biosimilar applicants and reference product sponsors be reported to the FTC. Section 1112 of the MMA requires that certain types of agreements executed on or after January 7, 2004 between a brand-name drug company and a generic drug applicant be filed with the FTC and the DoJ; MMA § 1113 states that “[a]ny filing required under Section 1112 shall be filed with the DoJ and the [FTC] not later than 10 business days after the date the agreements are executed;” and MMA § 1115 provides that the failure to timely file applicable agreements may result in a civil penalty of $11,000 for each day that a required filing has not been made. (For additional information on current FTC reporting requirements and reports, see here and here.)

The reporting requirements proposed in S. 2554 for biosimilar agreements would be similar to the requirements currently in place for drug products regulated under the FDC Act. S. 2554 is making its way through the Senate as calls for reporting of biosimilar agreements to the FTC have increased in the past couple of months (see here).