S. 1096: Preserve Access to Affordable Generics and Biosimilars Act

This bill prohibits parties from entering into any agreement that resolves or settles a patent claim related to the sale of a drug or biological product and that has anticompetitive effects. Such an agreement is presumed to have anticompetitive effects if the filer of a generic drug or biosimilar application receives anything of value and agrees to limit or forego research, development, manufacturing, marketing, or sales of the generic drug or biosimilar.

An agreement is exempt if the only consideration granted to the generic manufacturer is (1) the right to market and secure final approval for its product prior to the expiration of any statutory exclusivity, (2) a payment for reasonable litigation expenses, or (3) a covenant not to sue on any claim that the generic drug or biosimilar infringes a U.S. patent. An agreement is also exempt if the agreement's pro-competitive benefits outweigh the anticompetitive effects.

The bill provides for enforcement by the Federal Trade Commission (FTC). Violators are subject to penalties including the forfeiture of the 180-day marketing exclusivity period for a generic drug.

Written by the Congressional Research Service, Library of Congress.