NY State Senate Bill 2021-S4370B

Archive: Last Bill Status - In Senate Committee Rules Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jun 03, 2022	committed to rules
May 17, 2022	advanced to third reading
May 16, 2022	2nd report cal.
May 11, 2022	1st report cal.1331
May 05, 2022	print number 4370b
May 05, 2022	amend and recommit to health
May 02, 2022	print number 4370a
May 02, 2022	amend and recommit to health
Jan 05, 2022	referred to health
Feb 03, 2021	referred to health

Votes

- May 9, 2022 - Health Committee Vote
  S4370B
  
  8
  
  Aye
  
  5
  
  Nay
  
  1
  
  Aye with Reservations
  
  0
  
  Absent
  
  1
  
  Excused
  
  0
  
  Abstained
  - - Health Committee Vote: May 9, 2022
      
      aye (8)
      
      Biaggi
      
      Cleare
      
      Hoylman-Sigal
      
      Kaminsky
      
      May
      
      Rivera
      
      Ryan
      
      Salazar
      
      nay (5)
      
      Boyle
      
      Gallivan
      
      Oberacker
      
      Rath III
      
      Stec
      
      aye wr (1)
      
      Thomas
      
      excused (1)
      
      Brouk

Bill Amendments

Original

B (Active)

co-Sponsors

View additional co-sponsors

2021-S4370 - Details

See Assembly Version of this Bill:: A7245
Current Committee:: Senate Rules
Law Section:: Public Health Law
Laws Affected:: Add Art 2-A Title IV §§282 & 283, Pub Health L
Versions Introduced in 2023-2024 Legislative Session:: S4513, A7465

2021-S4370 - Summary

Relates to preserving access to affordable drugs; provides that an agreement resolving or settling, on a final or interim basis, a patent infringement claim, in connection with the sale of a pharmaceutical product, shall be presumed to have anticompetitive effects if a nonreference drug filer receives anything of value from another company asserting patent infringement and if the nonreference drug filer agrees to limit or forego research, development, manufacturing, marketing, or sales of the nonreference drug filer's product for any period of time.

2021-S4370 - Sponsor Memo

                                
 
BILL NUMBER: S4370

SPONSOR: BIAGGI
 
TITLE OF BILL:

An act to amend the public health law, in relation to preserving access
to affordable drugs

 
PURPOSE OF BILL:

To preserve access to affordable prescription drugs by banning pay-to-
delay agreements.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 amends Article 2-a of the public health law by adding a new
title IV to preserve access to prescription drugs by banning pay-to-de-
lay agreements.

Section 2 establishes that if any clause, sentence, paragraph, subdivi-
sion, section or part is found to be unvalid, the judgment will not

invalidate the remainder of the bill.

Section 3 establishes the effective date.

 
JUSTIFICATION:

Rising prescription drug prices have been devastating to New Yorkers who
depend on prescription drugs to keep them healthy. The growing number of
brand-name and specialty drugs with prices of $100,000 or more has led
many to question whether the costs associated with these products are
defensible or sustainable. The timely availability of generic and biosi-
milar drugs, which increase competition and help lower prices, play an
important role in addressing these concerns.  Brand-name drug manufac-
turers often file patent infringement lawsuits against the first generic
drug manufacturers to seek FDA approval for competing generic drugs.
Rather than face the costs and uncertainty associated with litigation,
some brand-name and generic drug manufacturers choose to enter into what
is known as a pay-for-delay agreement, where the brand-name drug
manufacturers compensates the generic drug manufacturer for keeping its
product off the market for a certain amount of time. These agreements
can be particularly problematic when they involve the first-to-file
generic manufacturer, because no other generic manufacturer can enter
the market until the first-to-file manufacturer has marketed its product
for 180 days.

These pay-for-delay agreements provide financial benefits to drug
manufacturers at the expense of consumers; the brand-name manufacturer
can continue to charge monopoly prices, and the generic company is
compensated for its inaction. The Federal Trade Commission (FTC) esti-
mates that pay-for delay agreements cost American consumers $3.5 billion
per year.

The FTC has found that pay-for-delay agreements prohibit generic entry
for an average of nearly 17 months longer than patent settlement agree-
ments without such payments. In the meantime, consumers must continue
paying brand-name drug prices, which can be as much as 85 percent higher
than the prices of their generic drug counterparts.  Any delay in gener-
ic entry results in a longer period of purchases at the full brand price
and, correspondingly, fewer purchases at less expensive generic prices.
This negatively impacts both consumers and other payers, including
taxpayer-funded health programs, such as Medicaid.

Generic drugs have proven to be one of the safest and most effective
ways for consumers to lower their prescription drug costs, and the use
of generic drugs has been steadily increasing. These drugs should not be
delayed from entering the marketplace.

Patients in New York -- and around the country -- are facing unaccepta-
ble costs and a lack of transparency about how medication is priced. For
too long we have allowed pharmaceutical companies to operate under lax
regulations at the expense of patients. This bill makes it the presump-
tion that an agreement resolving or settling a patent infringement claim
in connection to the sale of a pharmaceutical product has anti-competi-
tive effects if 1) a non reference drug filer receives anything of value
from another company asserting patent infringement and 2) the non refer-
ence drug filer agrees to forego research, development, manufacturing,
marketing, or sale of the drug for a period of time. The legislation
sets forth civil penalties for individuals who violate or assist in
violating this section to ensure compliance.

 
PRIOR LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect on the one hundred eightieth day after it
shall have become a law.

2021-S4370 - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4370
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             February 3, 2021
                                ___________
 
 Introduced  by  Sen.  BIAGGI -- read twice and ordered printed, and when
   printed to be committed to the Committee on Health
 
 AN ACT to amend the public health law, in relation to preserving  access
   to affordable drugs
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. Article 2-A of the public health law is amended by adding a
 new title IV to read as follows:
                                 TITLE IV
                   PRESERVING ACCESS TO AFFORDABLE DRUGS
 SECTION 282. DEFINITIONS.
         283. PRESERVING ACCESS TO AFFORDABLE DRUGS.
   § 282. DEFINITIONS. FOR THE PURPOSES  OF  THIS  TITLE,  THE  FOLLOWING
 TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   1. "ANDA" SHALL MEAN ABBREVIATED NEW DRUG APPLICATION.
   2. "ANDA FILER" SHALL MEAN A PARTY THAT OWNS OR CONTROLS AN ANDA FILED
 WITH  THE  FEDERAL  FOOD  AND  DRUG  ADMINISTRATION OR HAS THE EXCLUSIVE
 RIGHTS UNDER THAT ANDA TO DISTRIBUTE THE ANDA PRODUCT.
   3. "AGREEMENT" SHALL MEAN ANYTHING THAT WOULD CONSTITUTE AN  AGREEMENT
 UNDER STATE LAW.
   4.  "AGREEMENT  RESOLVING  OR  SETTLING  A  PATENT INFRINGEMENT CLAIM"
 INCLUDES ANY AGREEMENT THAT IS ENTERED INTO WITHIN THIRTY  DAYS  OF  THE
 RESOLUTION  OR  THE SETTLEMENT OF THE CLAIM, OR ANY OTHER AGREEMENT THAT
 IS CONTINGENT UPON, PROVIDES A CONTINGENT CONDITION FOR, OR IS OTHERWISE
 RELATED TO THE  RESOLUTION  OR  SETTLEMENT  OF  THE  CLAIM.  THIS  SHALL
 INCLUDE, BUT IS NOT LIMITED TO, THE FOLLOWING:
   (A) ANY AGREEMENT REQUIRED TO BE PROVIDED TO THE FEDERAL TRADE COMMIS-
 SION  OR  THE  ANTITRUST  DIVISION  OF  THE  UNITED STATES DEPARTMENT OF
 JUSTICE UNDER THE MEDICARE PRESCRIPTION DRUG, IMPROVEMENT,  AND  MODERN-
 IZATION ACT OF 2003, PUB. L. NO. 108-173;

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD04644-01-1

 S. 4370                             2
 
   (B)  ANY  AGREEMENT  BETWEEN  A  BIOSIMILAR OR INTERCHANGEABLE PRODUCT
 APPLICANT AND A REFERENCE PRODUCT  SPONSOR  UNDER  THE  BIOLOGICS  PRICE
 COMPETITION  AND  INNOVATION  ACT  OF  2009,  PUB.  L. NO. 111-148, THAT
 RESOLVES PATENT CLAIMS BETWEEN THE APPLICANT AND SPONSOR.
   5.  "BIOSIMILAR  BIOLOGICAL  PRODUCT  APPLICATION  FILER" SHALL MEAN A
 PARTY THAT OWNS OR CONTROLS A BIOSIMILAR BIOLOGICAL PRODUCT  APPLICATION
 FILED  WITH THE FEDERAL FOOD AND DRUG ADMINISTRATION PURSUANT TO SECTION
 351(K) OF THE PUBLIC HEALTH SERVICE ACT, 42 U.S.C. 262(K), FOR LICENSURE
 OF A BIOLOGICAL PRODUCT AS BIOSIMILAR TO,  OR  INTERCHANGEABLE  WITH,  A
 REFERENCE  PRODUCT,  OR THAT HAS THE EXCLUSIVE RIGHTS UNDER THE APPLICA-
 TION TO DISTRIBUTE THE BIOSIMILAR BIOLOGICAL PRODUCT.
   6. "NDA" SHALL MEAN A NEW DRUG APPLICATION.
   7. "NONREFERENCE DRUG FILER" SHALL MEAN EITHER:
   (A) AN ANDA FILER; OR
   (B) A BIOSIMILAR BIOLOGICAL PRODUCT APPLICATION FILER.
   8. "NONREFERENCE DRUG PRODUCT" SHALL MEAN THE PRODUCT TO  BE  MANUFAC-
 TURED  UNDER  AN  ANDA  THAT  IS  THE SUBJECT OF THE PATENT INFRINGEMENT
 CLAIM, A BIOSIMILAR BIOLOGICAL PRODUCT THAT IS THE PRODUCT TO  BE  MANU-
 FACTURED UNDER THE BIOSIMILAR BIOLOGICAL PRODUCT APPLICATION THAT IS THE
 SUBJECT OF THE PATENT INFRINGEMENT CLAIM, OR BOTH.
   9.  "PATENT  INFRINGEMENT" SHALL MEAN INFRINGEMENT OF ANY PATENT OR OF
 ANY FILED PATENT APPLICATION,  EXTENSION,  REISSUE,  RENEWAL,  DIVISION,
 CONTINUATION,  CONTINUATION IN PART, REEXAMINATION, PATENT TERM RESTORA-
 TION, PATENTS OF ADDITION, AND EXTENSIONS THEREOF.
   10. "PATENT INFRINGEMENT CLAIM" SHALL MEAN ANY ALLEGATION  MADE  TO  A
 NONREFERENCE  DRUG  FILER,  WHETHER OR NOT INCLUDED IN A COMPLAINT FILED
 WITH A COURT OF LAW, THAT ITS NONREFERENCE DRUG PRODUCT  OR  APPLICATION
 INFRINGES  ANY PATENT HELD BY, OR EXCLUSIVELY LICENSED TO, THE REFERENCE
 DRUG HOLDER.
   11. "REFERENCE DRUG HOLDER" SHALL MEAN EITHER:
   (A) A BRAND HOLDER THAT IS ANY OF THE FOLLOWING:
   (I) THE HOLDER OF AN APPROVED NDA FOR A DRUG PRODUCT APPLICATION FILED
 UNDER SECTION 505(B) OF THE FEDERAL FOOD, DRUG,  AND  COSMETIC  ACT,  21
 U.S.C. 355(B);
   (II)  A  PERSON OWNING OR CONTROLLING ENFORCEMENT OF THE PATENT LISTED
 IN THE APPROVED DRUG PRODUCTS WITH THERAPEUTIC  EQUIVALENCE  EVALUATIONS
 IN CONNECTION WITH THE NDA; OR
   (III)  THE  PREDECESSORS,  SUBSIDIARIES, DIVISIONS, GROUPS, AND AFFIL-
 IATES CONTROLLED BY, CONTROLLING, OR UNDER COMMON CONTROL WITH,  ANY  OF
 THE  ENTITIES  DESCRIBED  IN SUBPARAGRAPH (I) OR (II) OF THIS PARAGRAPH,
 WITH CONTROL TO BE PRESUMED BY DIRECT OR  INDIRECT  SHARE  OWNERSHIP  OF
 FIFTY  PERCENT  OR GREATER, AS WELL AS THE LICENSEES, LICENSORS, SUCCES-
 SORS, AND ASSIGNS OF EACH OF THOSE ENTITIES; OR
   (B) A BIOLOGICAL PRODUCT LICENSE HOLDER, WHICH SHALL MEAN ANY  OF  THE
 FOLLOWING:
   (I)  THE  HOLDER OF AN APPROVED BIOLOGICAL PRODUCT LICENSE APPLICATION
 FOR A BIOLOGICAL DRUG PRODUCT UNDER SECTION 351(A) OF THE PUBLIC  HEALTH
 SERVICE ACT, 42 U.S.C. 262(A);
   (II)  A  PERSON  OWNING OR CONTROLLING ENFORCEMENT OF ANY PATENTS THAT
 CLAIM THE BIOLOGICAL PRODUCT THAT IS THE SUBJECT OF THE APPROVED BIOLOG-
 ICAL PATENT LICENSE APPLICATION; OR
   (III) THE PREDECESSORS, SUBSIDIARIES, DIVISIONS,  GROUPS,  AND  AFFIL-
 IATES  CONTROLLED  BY, CONTROLLING, OR UNDER COMMON CONTROL WITH, ANY OF
 THE ENTITIES DESCRIBED IN SUBPARAGRAPH (I) OR (II)  OF  THIS  PARAGRAPH,
 WITH  CONTROL  TO  BE  PRESUMED BY DIRECT OR INDIRECT SHARE OWNERSHIP OF

 S. 4370                             3
 
 FIFTY PERCENT OR GREATER, AS WELL AS THE LICENSEES,  LICENSORS,  SUCCES-
 SORS, AND ASSIGNS OF EACH OF THOSE ENTITIES.
   12. "REFERENCE DRUG PRODUCT" SHALL MEAN THE PRODUCT TO BE MANUFACTURED
 BY  THE REFERENCE DRUG HOLDER AND INCLUDES BOTH BRANDED DRUGS OF THE NDA
 HOLDER AND THE BIOLOGIC DRUG PRODUCT OF  THE  BIOLOGIC  PRODUCT  LICENSE
 APPLICANT.
   13.  "STATUTORY  EXCLUSIVITY"  SHALL  MEAN  THOSE  PROHIBITIONS ON THE
 APPROVAL OF DRUG APPLICATIONS UNDER CLAUSES (II) THROUGH (IV) OF SECTION
 505(C)(3)(E), SECTION 527 OR SECTION 505A OF THE FEDERAL FOOD, DRUG, AND
 COSMETIC ACT, 21 U.S.C. 355(C)(3)(E), ON  THE  LICENSING  OF  BIOLOGICAL
 PRODUCT  APPLICATIONS  UNDER SECTION 262(K)(7) OF TITLE 42 OF THE UNITED
 STATES CODE OR SECTION 262(M)(2) OR (3) OF TITLE 42 OF THE UNITED STATES
 CODE.
   § 283. PRESERVING  ACCESS  TO  AFFORDABLE  DRUGS.  1.  (A)  EXCEPT  AS
 PROVIDED IN PARAGRAPH (C) OF THIS SUBDIVISION, AN AGREEMENT RESOLVING OR
 SETTLING,  ON  A FINAL OR INTERIM BASIS, A PATENT INFRINGEMENT CLAIM, IN
 CONNECTION WITH THE SALE OF A PHARMACEUTICAL PRODUCT, SHALL BE  PRESUMED
 TO HAVE ANTICOMPETITIVE EFFECTS AND SHALL BE A VIOLATION OF THIS SECTION
 IF BOTH OF THE FOLLOWING APPLY:
   (I)  A NONREFERENCE DRUG FILER RECEIVES ANYTHING OF VALUE FROM ANOTHER
 COMPANY ASSERTING PATENT INFRINGEMENT, INCLUDING, BUT NOT LIMITED TO, AN
 EXCLUSIVE LICENSE OR A PROMISE THAT THE BRAND COMPANY WILL NOT LAUNCH AN
 AUTHORIZED GENERIC VERSION OF ITS BRAND DRUG; AND
   (II) THE NONREFERENCE DRUG FILER AGREES TO LIMIT OR  FOREGO  RESEARCH,
 DEVELOPMENT, MANUFACTURING, MARKETING, OR SALES OF THE NONREFERENCE DRUG
 FILER'S PRODUCT FOR ANY PERIOD OF TIME.
   (B)  AS USED IN SUBPARAGRAPH (I) OF PARAGRAPH (A) OF THIS SUBDIVISION,
 "ANYTHING OF VALUE" SHALL NOT INCLUDE A SETTLEMENT OF A PATENT INFRINGE-
 MENT CLAIM IN WHICH THE CONSIDERATION GRANTED BY THE BRAND OR  REFERENCE
 DRUG  FILER  TO THE NONREFERENCE DRUG FILER AS PART OF THE RESOLUTION OR
 SETTLEMENT CONSISTS OF ONLY ONE OR MORE OF THE FOLLOWING:
   (I) THE RIGHT TO MARKET THE COMPETING PRODUCT  IN  THE  UNITED  STATES
 BEFORE THE EXPIRATION OF EITHER:
   (A) A PATENT THAT IS THE BASIS FOR THE PATENT INFRINGEMENT CLAIM; OR
   (B)  A  PATENT RIGHT OR OTHER STATUTORY EXCLUSIVITY THAT WOULD PREVENT
 THE MARKETING OF THE DRUG;
   (II) A COVENANT NOT TO SUE ON A CLAIM THAT THE NONREFERENCE DRUG PROD-
 UCT INFRINGES A UNITED STATES PATENT;
   (III) COMPENSATION FOR SAVED REASONABLE FUTURE LITIGATION EXPENSES  OF
 THE REFERENCE DRUG HOLDER BUT ONLY IF BOTH OF THE FOLLOWING ARE TRUE:
   (A)  THE TOTAL COMPENSATION FOR SAVED LITIGATION EXPENSES IS REFLECTED
 IN BUDGETS THAT THE REFERENCE DRUG  HOLDER  DOCUMENTED  AND  ADOPTED  AT
 LEAST SIX MONTHS BEFORE THE SETTLEMENT; AND
   (B) THE COMPENSATION SHALL NOT EXCEED THE LOWER OF THE FOLLOWING:
   (1) SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS; OR
   (2)  FIVE  PERCENT  OF  THE  REVENUE THAT THE NONREFERENCE DRUG HOLDER
 PROJECTED OR FORECASTED IT WOULD RECEIVE IN THE  FIRST  THREE  YEARS  OF
 SALES  OF  ITS  VERSION OF THE REFERENCE DRUG DOCUMENTED AT LEAST TWELVE
 MONTHS BEFORE THE SETTLEMENT. IF NO PROJECTIONS OR FORECASTS ARE  AVAIL-
 ABLE,  THE  COMPENSATION  SHALL  NOT  EXCEED  TWO HUNDRED FIFTY THOUSAND
 DOLLARS;
   (IV) AN AGREEMENT RESOLVING OR SETTLING A  PATENT  INFRINGEMENT  CLAIM
 THAT  PERMITS  A  NONREFERENCE DRUG FILER TO BEGIN SELLING, OFFERING FOR
 SALE, OR DISTRIBUTING THE NONREFERENCE DRUG  PRODUCT  IF  THE  REFERENCE
 DRUG  HOLDER  SEEKS  APPROVAL  TO LAUNCH, OBTAINS APPROVAL TO LAUNCH, OR
 LAUNCHES A DIFFERENT DOSAGE, STRENGTH, OR FORM  OF  THE  REFERENCE  DRUG

 S. 4370                             4
 
 HAVING  THE  SAME ACTIVE INGREDIENT BEFORE THE DATE SET BY THE AGREEMENT
 FOR ENTRY OF THE NONREFERENCE DRUG FILER. A DIFFERENT FORM OF THE REFER-
 ENCE DRUG SHALL NOT INCLUDE AN AUTHORIZED GENERIC VERSION OF THE  REFER-
 ENCE DRUG;
   (V)  AN  AGREEMENT  BY THE REFERENCE DRUG HOLDER NOT TO INTERFERE WITH
 THE NONREFERENCE DRUG FILER'S ABILITY TO SECURE AND MAINTAIN  REGULATORY
 APPROVAL  TO  MARKET  THE  NONREFERENCE  DRUG PRODUCT OR AN AGREEMENT TO
 FACILITATE THE NONREFERENCE DRUG FILER'S ABILITY TO SECURE AND  MAINTAIN
 REGULATORY APPROVAL TO MARKET THE NONREFERENCE DRUG PRODUCT; OR
   (VI)  AN  AGREEMENT RESOLVING A PATENT INFRINGEMENT CLAIM IN WHICH THE
 REFERENCE DRUG HOLDER  FORGIVES  THE  POTENTIAL  DAMAGES  ACCRUED  BY  A
 NONREFERENCE  DRUG HOLDER FOR AN AT-RISK LAUNCH OF THE NONREFERENCE DRUG
 PRODUCT THAT IS THE SUBJECT OF THAT CLAIM.
   (C) PARTIES TO AN AGREEMENT ARE NOT IN VIOLATION OF PARAGRAPH  (A)  OF
 THIS  SUBDIVISION  IF  THEY  CAN  DEMONSTRATE  BY A PREPONDERANCE OF THE
 EVIDENCE THAT EITHER OF THE FOLLOWING ARE MET:
   (I) THE VALUE RECEIVED BY THE NONREFERENCE  DRUG  FILER  DESCRIBED  IN
 SUBPARAGRAPH  (I)  OF  PARAGRAPH  (A)  OF THIS SUBDIVISION IS A FAIR AND
 REASONABLE COMPENSATION SOLELY FOR OTHER  GOODS  OR  SERVICES  THAT  THE
 NONREFERENCE DRUG FILER HAS PROMISED TO PROVIDE; OR
   (II)  THE AGREEMENT HAS DIRECTLY GENERATED PROCOMPETITIVE BENEFITS AND
 THE PROCOMPETITIVE BENEFITS OF THE AGREEMENT  OUTWEIGH  THE  ANTICOMPET-
 ITIVE EFFECTS OF THE AGREEMENT.
   2.  IN DETERMINING WHETHER THE PARTIES TO THE AGREEMENT HAVE MET THEIR
 BURDEN UNDER PARAGRAPH (C) OF SUBDIVISION ONE OF THIS SECTION,  A  COURT
 OF COMPETENT JURISDICTION SHALL NOT PRESUME ANY OF THE FOLLOWING:
   (A)  THAT ENTRY INTO THE MARKETPLACE COULD NOT HAVE OCCURRED UNTIL THE
 EXPIRATION OF THE RELEVANT PATENT EXCLUSIVITY OR  THAT  THE  AGREEMENT'S
 PROVISION  FOR ENTRY OF THE NONREFERENCE DRUG PRODUCT BEFORE THE EXPIRA-
 TION OF ANY PATENT EXCLUSIVITY MEANS THAT THE  AGREEMENT  IS  PROCOMPET-
 ITIVE WITHIN THE MEANING OF SUBPARAGRAPH (II) OF PARAGRAPH (C) OF SUBDI-
 VISION ONE OF THIS SECTION;
   (B)  THAT  ANY PATENT IS ENFORCEABLE AND INFRINGED BY THE NONREFERENCE
 DRUG FILER IN THE ABSENCE OF A FINAL ADJUDICATION BINDING ON  THE  FILER
 OF THOSE ISSUES;
   (C)  THAT  THE  AGREEMENT CAUSED NO DELAY IN ENTRY OF THE NONREFERENCE
 DRUG FILER'S DRUG PRODUCT BECAUSE OF THE LACK OF FEDERAL FOOD  AND  DRUG
 ADMINISTRATION  (FDA)  APPROVAL  OF THAT OR OF ANOTHER NONREFERENCE DRUG
 PRODUCT;
   (D) THAT THE AGREEMENT CAUSED NO HARM OR DELAY DUE TO THE  POSSIBILITY
 THAT  THE  NONREFERENCE  DRUG  FILER'S  DRUG PRODUCT MIGHT INFRINGE SOME
 PATENT THAT HAS NOT BEEN ASSERTED AGAINST THE NONREFERENCE DRUG FILER OR
 THAT IS NOT SUBJECT TO A FINAL AND BINDING ADJUDICATION ON THAT FILER AS
 TO THE PATENT'S SCOPE, ENFORCEABILITY, AND INFRINGEMENT; OR
   (E) THIS SUBDIVISION SHALL NOT BE CONSTRUED TO PRECLUDE A  PARTY  FROM
 INTRODUCING  EVIDENCE REGARDING PARAGRAPHS (A), (B), (C) AND (D) OF THIS
 SUBDIVISION, INCLUSIVE, AND SHALL NOT BE CONSTRUED TO PRECLUDE  A  COURT
 OF  COMPETENT  JURISDICTION  FROM MAKING A DETERMINATION REGARDING PARA-
 GRAPHS (A), (B), (C) AND (D) OF THIS SUBDIVISION,  INCLUSIVE,  BASED  ON
 THE FULL SCOPE OF THE EVIDENCE.
   3.  IN DETERMINING WHETHER THE PARTIES TO THE AGREEMENT HAVE MET THEIR
 BURDEN UNDER PARAGRAPH (C) OF SUBDIVISION ONE OF THIS SECTION,  A  COURT
 OF COMPETENT JURISDICTION SHALL PRESUME THAT THE RELEVANT PRODUCT MARKET
 IS  THAT MARKET CONSISTING OF THE BRAND OR REFERENCE DRUG OF THE COMPANY
 ALLEGING PATENT INFRINGEMENT AND THE DRUG PRODUCT  OF  THE  NONREFERENCE
 COMPANY ACCUSED OF INFRINGEMENT AND ANY OTHER BIOLOGICAL PRODUCT THAT IS

 S. 4370                             5
 
 LICENSED  AS BIOSIMILAR OR IS AN AB-RATED GENERIC TO THE REFERENCE PROD-
 UCT.
   4.  (A) THIS SECTION SHALL NOT MODIFY, IMPAIR, LIMIT, OR SUPERSEDE THE
 APPLICABILITY OF THE ANTITRUST LAWS OF THE  STATE  PURSUANT  TO  ARTICLE
 TWENTY-TWO  OF  THE GENERAL BUSINESS LAW, UNFAIR COMPETITION LAWS OF THE
 STATE PURSUANT TO ARTICLE TWENTY-TWO-A OF THE GENERAL  BUSINESS  LAW  OR
 THE  AVAILABILITY  OF DAMAGES OR REMEDIES PROVIDED THEREIN. THIS SECTION
 SHALL NOT MODIFY, IMPAIR, LIMIT, OR SUPERSEDE  THE  RIGHT  OF  ANY  DRUG
 COMPANY  APPLICANT TO ASSERT CLAIMS OR COUNTERCLAIMS AGAINST ANY PERSON,
 UNDER THE ANTITRUST LAWS OR OTHER LAWS RELATING TO UNFAIR COMPETITION OF
 THE FEDERAL ANTITRUST LAW OR STATE LAW.
   (B) IF ANY PROVISION OF THIS SUBDIVISION, AN AMENDMENT  MADE  TO  THIS
 SUBDIVISION,  OR  THE  APPLICATION  OF ANY PROVISION OR AMENDMENT TO ANY
 PERSON OR CIRCUMSTANCE IS HELD TO BE UNCONSTITUTIONAL, THE REMAINDER  OF
 THIS  SUBDIVISION,  THE  AMENDMENTS  MADE  TO  THIS SUBDIVISION, AND THE
 APPLICATION OF THE PROVISIONS OF THIS SUBDIVISION OR AMENDMENTS  TO  ANY
 PERSON OR CIRCUMSTANCE SHALL NOT BE AFFECTED.
   5.  (A)(I)  EACH  PERSON  THAT VIOLATES OR ASSISTS IN THE VIOLATION OF
 THIS SECTION SHALL FORFEIT AND PAY TO THE STATE A CIVIL  PENALTY  SUFFI-
 CIENT TO DETER VIOLATIONS OF THIS SECTION, AS FOLLOWS:
   (A)  IF THE PERSON WHO VIOLATED THIS SECTION RECEIVED ANY VALUE DUE TO
 THAT VIOLATION, AN AMOUNT UP TO THREE TIMES THE VALUE  RECEIVED  BY  THE
 PARTY  THAT IS REASONABLY ATTRIBUTABLE TO THE VIOLATION OF THIS SECTION,
 OR TWENTY MILLION DOLLARS, WHICHEVER IS GREATER; OR
   (B) IF THE VIOLATOR HAS NOT RECEIVED ANYTHING OF VALUE AS DESCRIBED IN
 THIS SUBPARAGRAPH, AN AMOUNT UP TO THREE TIMES THE VALUE GIVEN TO  OTHER
 PARTIES  TO  THE  AGREEMENT  REASONABLY ATTRIBUTABLE TO THE VIOLATION OF
 THIS SECTION, OR TWENTY MILLION DOLLARS.
   (C) FOR PURPOSES OF THIS SUBDIVISION, "REASONABLY ATTRIBUTABLE TO  THE
 VIOLATION"  SHALL  BE  DETERMINED BY THE STATE'S SHARE OF THE MARKET FOR
 THE BRAND DRUG AT ISSUE IN THE AGREEMENT.
   (II) ANY PENALTY DESCRIBED IN SUBPARAGRAPH (I) OF THIS PARAGRAPH SHALL
 ACCRUE ONLY TO THE STATE AND  SHALL  BE  RECOVERED  IN  A  CIVIL  ACTION
 BROUGHT BY THE ATTORNEY GENERAL IN ITS OWN NAME, OR BY ANY OF ITS ATTOR-
 NEYS  DESIGNATED  BY IT FOR THAT PURPOSE, AGAINST ANY PARTY TO AN AGREE-
 MENT THAT VIOLATES THIS SECTION.
   (B) EACH PARTY THAT VIOLATES OR  ASSISTS  IN  THE  VIOLATION  OF  THIS
 SECTION SHALL BE LIABLE FOR ANY DAMAGES, PENALTIES, COSTS, FEES, INJUNC-
 TIONS,  OR  OTHER REMEDIES THAT MAY BE JUST AND REASONABLE AND AVAILABLE
 UNDER ARTICLES TWENTY-TWO OR TWENTY-TWO-A OF THE GENERAL BUSINESS LAW.
   (C) IF THE STATE IS AWARDED PENALTIES UNDER SUBPARAGRAPH (I) OF  PARA-
 GRAPH  (A)  OF THIS SUBDIVISION, IT SHALL NOT RECOVER PENALTIES PURSUANT
 TO ANOTHER LAW IDENTIFIED IN PARAGRAPH (B)  OF  THIS  SUBDIVISION.  THIS
 SECTION SHALL NOT BE CONSTRUED TO FORECLOSE THE STATE'S ABILITY TO CLAIM
 ANY  RELIEF  OR  DAMAGES AVAILABLE IN PARAGRAPH (B) OF THIS SUBDIVISION,
 OTHER THAN THOSE THAT ARE PENALTIES.
   (D) AN ACTION TO ENFORCE A CAUSE OF ACTION FOR  A  VIOLATION  OF  THIS
 SECTION  SHALL  BE COMMENCED WITHIN FOUR YEARS AFTER THE CAUSE OF ACTION
 ACCRUED.
   § 2. Severability clause. If any clause, sentence, paragraph, subdivi-
 sion, section or part of this act shall be  adjudged  by  any  court  of
 competent  jurisdiction  to  be invalid, such judgment shall not affect,
 impair, or invalidate the remainder thereof, but shall  be  confined  in
 its  operation  to the clause, sentence, paragraph, subdivision, section
 or part thereof directly involved in the controversy in which such judg-
 ment shall have been rendered. It is hereby declared to be the intent of

 S. 4370                             6
 
 the legislature that this act would  have  been  enacted  even  if  such
 invalid provisions had not been included herein.
   § 3. This act shall take effect on the one hundred eightieth day after
 it shall have become a law.

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2021-S4370A - Details

See Assembly Version of this Bill:: A7245
Current Committee:: Senate Rules
Law Section:: Public Health Law
Laws Affected:: Add Art 2-A Title IV §§282 & 283, Pub Health L
Versions Introduced in 2023-2024 Legislative Session:: S4513, A7465

2021-S4370A - Summary

2021-S4370A - Sponsor Memo

                                 
BILL NUMBER: S4370A

SPONSOR: BIAGGI
 
TITLE OF BILL

An act to amend the public health law, in relation to preserving access
to affordable drugs

 
PURPOSE OF BILL:

To preserve access to affordable prescription drugs by banning pay-to-
delay agreements.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 amends Article 2-a of the public health law by adding a new
title IV to preserve access to prescription drugs by banning pay-to-de-
lay agreements.

Section 2 establishes that if any clause, sentence, paragraph, subdivi-
sion, section or part is found to be invalid or unenforceable, the judg-
ment will not invalidate the remainder of the bill.

Section 3 establishes the effective date.

 
JUSTIFICATION:

Rising prescription drug prices have been devastating to New Yorkers who
depend on prescription drugs to keep them healthy. The growing number of
brand-name and specialty drugs with prices of $100,000 or more has led
many to question whether the costs associated with these products are
defensible or sustainable. The timely availability of generic and biosi-
milar drugs, which increase competition and help lower prices, play an
important role in addressing these concerns.

Brand-name drug manufacturers often file patent infringement lawsuits
against the first generic drug manufacturers to seek FDA approval for
competing generic drugs. Rather than face the costs and uncertainty
associated with litigation, some brand-name and generic drug manufactur-
ers choose to enter into what is known as a pay-for-delay agreement,
where the brand-name drug manufacturers compensates the generic drug
manufacturer for keeping its product off the market for a certain amount
of time. These agreements can be particularly problematic when they
involve the first-to-file generic manufacturer, because no other generic
manufacturer can enter the market until the first-to-file manufacturer
has marketed its product for 180 days.

These pay-for-delay agreements provide financial benefits to drug
manufacturers at the expense of consumers; the brand-name manufacturer
can continue to charge monopoly prices, and the generic company is
compensated for its inaction. The Federal Trade Commission (FTC) esti-
mates that pay-for delay agreements cost American consumers $3.5 billion
per year.

The FTC has found that pay-for-delay agreements prohibit generic entry
for an average of nearly 17 months longer than patent settlement agree-
ments without such payments. In the meantime, consumers must continue
paying brand-name drug prices, which can be as much as 85 percent higher
than the prices of their generic drug counterparts.  Any delay in gener-
ic entry results in a longer period of purchases at the full brand price
and, correspondingly, fewer purchases at less expensive generic prices.
This negatively impacts both consumers and other payers, including
taxpayer-funded health programs, such as Medicaid.

Generic drugs have proven to be one of the safest and most effective
ways for consumers to lower their prescription drug costs, and the use
of generic drugs has been steadily increasing. These drugs should not be
delayed from entering the marketplace.

Patients in New York -- and around the country -- are facing unaccepta-
ble costs and a lack of transparency about how medication is priced. For
too long we have allowed pharmaceutical companies to operate under lax
regulations at the expense of patients. This bill makes it the presump-
tion that an agreement resolving or settling a patent infringement claim
in connection to the sale of a pharmaceutical product has anti-competi-
tive effects if 1) a non reference drug filer receives anything of value
from another company asserting patent infringement and 2) the non refer-
ence drug filer agrees to forego research, development, manufacturing,
marketing, or sale of the drug for a period of time. The legislation
sets forth civil penalties for individuals who violate or assist in
violating this section to ensure compliance.

 
PRIOR LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect on the sixtieth day after it shall have
become a law.

2021-S4370A - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  4370--A
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             February 3, 2021
                                ___________
 
 Introduced  by  Sens.  BIAGGI, BROOKS, BROUK, COMRIE, GAUGHRAN, HOYLMAN,
   LIU, MANNION, MAY, MYRIE, RAMOS -- read twice and ordered printed, and
   when printed to be committed to the Committee on Health -- recommitted
   to the Committee on Health in accordance with Senate Rule 6, sec. 8 --
   committee discharged, bill amended, ordered reprinted as  amended  and
   recommitted to said committee
 
 AN  ACT to amend the public health law, in relation to preserving access
   to affordable drugs
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Article 2-A of the public health law is amended by adding a
 new title IV to read as follows:
                                 TITLE IV
                   PRESERVING ACCESS TO AFFORDABLE DRUGS
 SECTION 282. DEFINITIONS.
         283. PRESERVING ACCESS TO AFFORDABLE DRUGS.
   §  282.  DEFINITIONS.  FOR  THE  PURPOSES OF THIS TITLE, THE FOLLOWING
 TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   1. "ANDA" SHALL MEAN ABBREVIATED NEW DRUG APPLICATION AS DESCRIBED  BY
 505(J) OF THE FEDERAL FOOD, DRUG, AND COSMETIC ACT, 21 U.S.C. 335(J).
   2. "ANDA FILER" SHALL MEAN A PARTY THAT OWNS OR CONTROLS AN ANDA FILED
 WITH  THE  FEDERAL  FOOD  AND  DRUG  ADMINISTRATION OR HAS THE EXCLUSIVE
 RIGHTS UNDER THAT ANDA TO DISTRIBUTE THE ANDA PRODUCT.
   3. "AGREEMENT" SHALL MEAN ANYTHING THAT WOULD CONSTITUTE AN  AGREEMENT
 UNDER STATE LAW.
   4.  "AGREEMENT  RESOLVING  OR  SETTLING  A  PATENT INFRINGEMENT CLAIM"
 INCLUDES ANY AGREEMENT THAT IS ENTERED INTO WITHIN THIRTY  DAYS  OF  THE
 RESOLUTION  OR  THE SETTLEMENT OF THE CLAIM, OR ANY OTHER AGREEMENT THAT
 IS CONTINGENT UPON, PROVIDES A CONTINGENT CONDITION FOR, OR IS OTHERWISE
 RELATED TO THE  RESOLUTION  OR  SETTLEMENT  OF  THE  CLAIM.  THIS  SHALL
 INCLUDE, BUT IS NOT LIMITED TO, THE FOLLOWING:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD04644-02-2

 S. 4370--A                          2
 
   (A) ANY AGREEMENT REQUIRED TO BE PROVIDED TO THE FEDERAL TRADE COMMIS-
 SION  OR  THE  ANTITRUST  DIVISION  OF  THE  UNITED STATES DEPARTMENT OF
 JUSTICE UNDER THE MEDICARE PRESCRIPTION DRUG, IMPROVEMENT,  AND  MODERN-
 IZATION ACT OF 2003, PUB. L. NO. 108-173;
   (B)  ANY  AGREEMENT  BETWEEN  A  BIOSIMILAR OR INTERCHANGEABLE PRODUCT
 APPLICANT AND A REFERENCE PRODUCT  SPONSOR  UNDER  THE  BIOLOGICS  PRICE
 COMPETITION  AND  INNOVATION  ACT  OF  2009,  PUB.  L. NO. 111-148, THAT
 RESOLVES PATENT CLAIMS BETWEEN THE APPLICANT AND SPONSOR.
   5. "BIOSIMILAR BIOLOGICAL PRODUCT  APPLICATION  FILER"  SHALL  MEAN  A
 PARTY  THAT OWNS OR CONTROLS A BIOSIMILAR BIOLOGICAL PRODUCT APPLICATION
 FILED WITH THE FEDERAL FOOD AND DRUG ADMINISTRATION PURSUANT TO  SECTION
 351(K) OF THE PUBLIC HEALTH SERVICE ACT, 42 U.S.C. 262(K), FOR LICENSURE
 OF  A  BIOLOGICAL  PRODUCT  AS BIOSIMILAR TO, OR INTERCHANGEABLE WITH, A
 REFERENCE PRODUCT, OR THAT HAS THE EXCLUSIVE RIGHTS UNDER  THE  APPLICA-
 TION TO DISTRIBUTE THE BIOSIMILAR BIOLOGICAL PRODUCT.
   6. "NDA" SHALL MEAN A NEW DRUG APPLICATION.
   7. "NONREFERENCE DRUG FILER" SHALL MEAN EITHER:
   (A) AN ANDA FILER;
   (B)  A COMPANY THAT SEEKS AN ABBREVIATED APPROVAL PATHWAY FOR ITS DRUG
 PRODUCT UNDER 505(B)(2) OF THE FEDERAL FOOD, DRUG, AND  COSMETIC ACT, 21
 U.S.C. 355(B)(2); OR
   (C) A BIOSIMILAR BIOLOGICAL  PRODUCT  APPLICATION  FILER,  OR  COMPANY
 SEEKING FDA APPROVAL FOR A BIOSIMILAR UNDER 42 U.S.C. 262.
   8.  "NONREFERENCE  DRUG PRODUCT" SHALL MEAN THE PRODUCT TO BE MANUFAC-
 TURED UNDER AN ANDA THAT IS  THE  SUBJECT  OF  THE  PATENT  INFRINGEMENT
 CLAIM,  A  BIOSIMILAR BIOLOGICAL PRODUCT THAT IS THE PRODUCT TO BE MANU-
 FACTURED UNDER THE BIOSIMILAR BIOLOGICAL PRODUCT APPLICATION THAT IS THE
 SUBJECT OF THE PATENT INFRINGEMENT CLAIM, OR BOTH.
   9. "PATENT INFRINGEMENT" SHALL MEAN INFRINGEMENT OF ANY PATENT  OR  OF
 ANY  FILED  PATENT  APPLICATION,  EXTENSION, REISSUE, RENEWAL, DIVISION,
 CONTINUATION, CONTINUATION IN PART, REEXAMINATION, PATENT TERM  RESTORA-
 TION, PATENTS OF ADDITION, AND EXTENSIONS THEREOF.
   10.  "PATENT  INFRINGEMENT  CLAIM" SHALL MEAN ANY ALLEGATION MADE TO A
 NONREFERENCE DRUG FILER, WHETHER OR NOT INCLUDED IN  A  COMPLAINT  FILED
 WITH  A  COURT OF LAW, THAT ITS NONREFERENCE DRUG PRODUCT OR APPLICATION
 INFRINGES ANY PATENT HELD BY, OR EXCLUSIVELY LICENSED TO, THE  REFERENCE
 DRUG HOLDER.
   11. "REFERENCE DRUG HOLDER" SHALL MEAN EITHER:
   (A) A BRAND HOLDER THAT IS ANY OF THE FOLLOWING:
   (I) THE HOLDER OF AN APPROVED NDA FOR A DRUG PRODUCT APPLICATION FILED
 UNDER  SECTION  505(B)  OF  THE FEDERAL FOOD, DRUG, AND COSMETIC ACT, 21
 U.S.C. 355(B);
   (II) A PERSON OWNING OR CONTROLLING ENFORCEMENT OF THE  PATENT  LISTED
 IN  THE  APPROVED DRUG PRODUCTS WITH THERAPEUTIC EQUIVALENCE EVALUATIONS
 IN CONNECTION WITH THE NDA; OR
   (III) THE PREDECESSORS, SUBSIDIARIES, DIVISIONS,  GROUPS,  AND  AFFIL-
 IATES  CONTROLLED  BY, CONTROLLING, OR UNDER COMMON CONTROL WITH, ANY OF
 THE ENTITIES DESCRIBED IN SUBPARAGRAPH (I) OR (II)  OF  THIS  PARAGRAPH,
 WITH  CONTROL  TO  BE  PRESUMED BY DIRECT OR INDIRECT SHARE OWNERSHIP OF
 FIFTY PERCENT OR GREATER, AS WELL AS THE LICENSEES,  LICENSORS,  SUCCES-
 SORS, AND ASSIGNS OF EACH OF THOSE ENTITIES; OR
   (B)  A  BIOLOGICAL PRODUCT LICENSE HOLDER, WHICH SHALL MEAN ANY OF THE
 FOLLOWING:
   (I) THE HOLDER OF AN APPROVED BIOLOGICAL PRODUCT  LICENSE  APPLICATION
 FOR  A BIOLOGICAL DRUG PRODUCT UNDER SECTION 351(A) OF THE PUBLIC HEALTH
 SERVICE ACT, 42 U.S.C. 262(A);
 S. 4370--A                          3
 
   (II) A PERSON OWNING OR CONTROLLING ENFORCEMENT OF  ANY  PATENTS  THAT
 CLAIM THE BIOLOGICAL PRODUCT THAT IS THE SUBJECT OF THE APPROVED BIOLOG-
 ICAL PATENT LICENSE APPLICATION; OR
   (III)  THE  PREDECESSORS,  SUBSIDIARIES, DIVISIONS, GROUPS, AND AFFIL-
 IATES CONTROLLED BY, CONTROLLING, OR UNDER COMMON CONTROL WITH,  ANY  OF
 THE  ENTITIES  DESCRIBED  IN SUBPARAGRAPH (I) OR (II) OF THIS PARAGRAPH,
 WITH CONTROL TO BE PRESUMED BY DIRECT OR  INDIRECT  SHARE  OWNERSHIP  OF
 FIFTY  PERCENT  OR GREATER, AS WELL AS THE LICENSEES, LICENSORS, SUCCES-
 SORS, AND ASSIGNS OF EACH OF THOSE ENTITIES.
   12. "REFERENCE DRUG PRODUCT" SHALL MEAN THE PRODUCT TO BE MANUFACTURED
 BY THE REFERENCE DRUG HOLDER AND INCLUDES BOTH BRANDED DRUGS OF THE  NDA
 HOLDER  AND  THE  BIOLOGIC  DRUG PRODUCT OF THE BIOLOGIC PRODUCT LICENSE
 APPLICANT.
   13. "STATUTORY EXCLUSIVITY"  SHALL  MEAN  THOSE  PROHIBITIONS  ON  THE
 APPROVAL OF DRUG APPLICATIONS UNDER CLAUSES (II) THROUGH (IV) OF SECTION
 505(C)(3)(E), SECTION 527 OR SECTION 505A OF THE FEDERAL FOOD, DRUG, AND
 COSMETIC  ACT,  21  U.S.C.  355(C)(3)(E), ON THE LICENSING OF BIOLOGICAL
 PRODUCT APPLICATIONS UNDER SECTION 262(K)(7) OF TITLE 42 OF  THE  UNITED
 STATES CODE OR SECTION 262(M)(2) OR (3) OF TITLE 42 OF THE UNITED STATES
 CODE.
   §  283.  PRESERVING  ACCESS  TO  AFFORDABLE  DRUGS.  1.  (A) EXCEPT AS
 PROVIDED IN PARAGRAPH (C) OF THIS SUBDIVISION, AN AGREEMENT RESOLVING OR
 SETTLING, ON A FINAL OR INTERIM BASIS, A PATENT INFRINGEMENT  CLAIM,  IN
 CONNECTION  WITH THE SALE OF A PHARMACEUTICAL PRODUCT, SHALL BE PRESUMED
 TO HAVE ANTICOMPETITIVE EFFECTS AND SHALL BE A VIOLATION OF THIS SECTION
 IF BOTH OF THE FOLLOWING APPLY:
   (I) A NONREFERENCE DRUG FILER RECEIVES ANYTHING OF VALUE FROM  ANOTHER
 COMPANY ASSERTING PATENT INFRINGEMENT, INCLUDING, BUT NOT LIMITED TO, AN
 EXCLUSIVE LICENSE OR A PROMISE THAT THE BRAND COMPANY WILL NOT LAUNCH AN
 AUTHORIZED GENERIC VERSION OF ITS BRAND DRUG; AND
   (II)  THE  NONREFERENCE DRUG FILER AGREES TO LIMIT OR FOREGO RESEARCH,
 DEVELOPMENT, MANUFACTURING, MARKETING, OR SALES OF THE NONREFERENCE DRUG
 FILER'S PRODUCT FOR ANY PERIOD OF TIME.
   (B) AS USED IN SUBPARAGRAPH (I) OF PARAGRAPH (A) OF THIS  SUBDIVISION,
 "ANYTHING  OF VALUE" SHALL BE INTERPRETED BROADLY TO INCLUDE ANY TYPE OF
 CONSIDERATION, VALUE OR BENEFIT A REFERENCE DRUG HOLDER OR  NONREFERENCE
 DRUG FILER COULD POSSIBLY OBTAIN FROM THE AGREEMENT. "ANYTHING OF VALUE"
 SHALL  NOT  INCLUDE A SETTLEMENT OF A PATENT INFRINGEMENT CLAIM IN WHICH
 THE CONSIDERATION GRANTED BY THE BRAND OR REFERENCE DRUG HOLDER  TO  THE
 NONREFERENCE DRUG FILER AS PART OF THE RESOLUTION OR SETTLEMENT CONSISTS
 OF ONLY ONE OR MORE OF THE FOLLOWING:
   (I)  THE  RIGHT  TO  MARKET THE COMPETING PRODUCT IN THE UNITED STATES
 BEFORE THE EXPIRATION OF EITHER:
   (A) A PATENT THAT IS THE BASIS FOR THE PATENT INFRINGEMENT CLAIM; OR
   (B) A PATENT RIGHT OR OTHER STATUTORY EXCLUSIVITY THAT  WOULD  PREVENT
 THE MARKETING OF THE DRUG;
   (II) A COVENANT NOT TO SUE ON A CLAIM THAT THE NONREFERENCE DRUG PROD-
 UCT INFRINGES A UNITED STATES PATENT;
   (III)  COMPENSATION FOR SAVED REASONABLE FUTURE LITIGATION EXPENSES OF
 THE REFERENCE DRUG HOLDER BUT ONLY IF BOTH OF THE FOLLOWING ARE TRUE:
   (A) THE TOTAL COMPENSATION FOR SAVED LITIGATION EXPENSES IS  REFLECTED
 IN  BUDGETS  THAT  THE  REFERENCE  DRUG HOLDER DOCUMENTED AND ADOPTED AT
 LEAST SIX MONTHS BEFORE THE SETTLEMENT; AND
   (B) THE COMPENSATION SHALL NOT EXCEED THE LOWER OF THE FOLLOWING:
   (1) SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS; OR
 S. 4370--A                          4
 
   (2) FIVE PERCENT OF THE  REVENUE  THAT  THE  NONREFERENCE  DRUG  FILER
 PROJECTED  OR  FORECASTED  IT  WOULD RECEIVE IN THE FIRST THREE YEARS OF
 SALES OF ITS VERSION OF THE REFERENCE DRUG DOCUMENTED  AT  LEAST  TWELVE
 MONTHS  BEFORE THE SETTLEMENT. IF NO PROJECTIONS OR FORECASTS ARE AVAIL-
 ABLE,  THE  COMPENSATION  SHALL  NOT  EXCEED  TWO HUNDRED FIFTY THOUSAND
 DOLLARS;
   (IV) AN AGREEMENT RESOLVING OR SETTLING A  PATENT  INFRINGEMENT  CLAIM
 THAT  PERMITS  A  NONREFERENCE DRUG FILER TO BEGIN SELLING, OFFERING FOR
 SALE, OR DISTRIBUTING THE NONREFERENCE DRUG  PRODUCT  IF  THE  REFERENCE
 DRUG  HOLDER  SEEKS  APPROVAL  TO LAUNCH, OBTAINS APPROVAL TO LAUNCH, OR
 LAUNCHES A DIFFERENT DOSAGE, STRENGTH, OR FORM  OF  THE  REFERENCE  DRUG
 HAVING  THE  SAME ACTIVE INGREDIENT BEFORE THE DATE SET BY THE AGREEMENT
 FOR ENTRY OF THE NONREFERENCE DRUG FILER. A DIFFERENT FORM OF THE REFER-
 ENCE DRUG SHALL NOT INCLUDE AN AUTHORIZED GENERIC VERSION OF THE  REFER-
 ENCE DRUG;
   (V)  AN  AGREEMENT  BY THE REFERENCE DRUG HOLDER NOT TO INTERFERE WITH
 THE NONREFERENCE DRUG FILER'S ABILITY TO SECURE AND MAINTAIN  REGULATORY
 APPROVAL  TO  MARKET  THE  NONREFERENCE  DRUG PRODUCT OR AN AGREEMENT TO
 FACILITATE THE NONREFERENCE DRUG FILER'S ABILITY TO SECURE AND  MAINTAIN
 REGULATORY APPROVAL TO MARKET THE NONREFERENCE DRUG PRODUCT; OR
   (VI)  AN  AGREEMENT RESOLVING A PATENT INFRINGEMENT CLAIM IN WHICH THE
 REFERENCE DRUG HOLDER  FORGIVES  THE  POTENTIAL  DAMAGES  ACCRUED  BY  A
 NONREFERENCE  DRUG  FILER FOR AN AT-RISK LAUNCH OF THE NONREFERENCE DRUG
 PRODUCT THAT IS THE SUBJECT OF THAT CLAIM.
   (C) PARTIES TO AN AGREEMENT ARE NOT IN VIOLATION OF PARAGRAPH  (A)  OF
 THIS  SUBDIVISION  IF  THEY  CAN  DEMONSTRATE  BY  CLEAR  AND CONVINCING
 EVIDENCE THAT EITHER OF THE FOLLOWING ARE MET:
   (I) THE VALUE RECEIVED BY THE NONREFERENCE  DRUG  FILER  DESCRIBED  IN
 SUBPARAGRAPH  (I)  OF  PARAGRAPH  (A)  OF THIS SUBDIVISION IS A FAIR AND
 REASONABLE COMPENSATION SOLELY FOR OTHER  GOODS  OR  SERVICES  THAT  THE
 NONREFERENCE DRUG FILER HAS PROMISED TO PROVIDE; OR
   (II)  THE AGREEMENT HAS DIRECTLY GENERATED PROCOMPETITIVE BENEFITS AND
 THE PROCOMPETITIVE BENEFITS OF THE AGREEMENT  OUTWEIGH  THE  ANTICOMPET-
 ITIVE EFFECTS OF THE AGREEMENT.
   2.  IN DETERMINING WHETHER THE PARTIES TO THE AGREEMENT HAVE MET THEIR
 BURDEN UNDER PARAGRAPH (C) OF SUBDIVISION ONE OF THIS SECTION,  A  COURT
 OF COMPETENT JURISDICTION SHALL NOT CONSIDER ANY OF THE FOLLOWING:
   (A)  THAT ENTRY INTO THE MARKETPLACE COULD NOT HAVE OCCURRED UNTIL THE
 EXPIRATION OF THE RELEVANT PATENT EXCLUSIVITY OR  THAT  THE  AGREEMENT'S
 PROVISION  FOR ENTRY OF THE NONREFERENCE DRUG PRODUCT BEFORE THE EXPIRA-
 TION OF ANY PATENT EXCLUSIVITY MEANS THAT THE  AGREEMENT  IS  PROCOMPET-
 ITIVE WITHIN THE MEANING OF SUBPARAGRAPH (II) OF PARAGRAPH (C) OF SUBDI-
 VISION ONE OF THIS SECTION;
   (B)  THAT  ANY PATENT IS ENFORCEABLE AND INFRINGED BY THE NONREFERENCE
 DRUG FILER IN THE ABSENCE OF A FINAL ADJUDICATION BINDING ON  THE  FILER
 OF THOSE ISSUES;
   (C)  THAT  THE  AGREEMENT CAUSED NO DELAY IN ENTRY OF THE NONREFERENCE
 DRUG FILER'S DRUG PRODUCT BECAUSE OF THE LACK OF FEDERAL FOOD  AND  DRUG
 ADMINISTRATION  (FDA)  APPROVAL  OF THAT OR OF ANOTHER NONREFERENCE DRUG
 PRODUCT; OR
   (D) THAT THE AGREEMENT CAUSED NO HARM OR DELAY DUE TO THE  POSSIBILITY
 THAT  THE  NONREFERENCE  DRUG  FILER'S  DRUG PRODUCT MIGHT INFRINGE SOME
 PATENT THAT HAS NOT BEEN ASSERTED AGAINST THE NONREFERENCE DRUG FILER OR
 THAT IS NOT SUBJECT TO A FINAL AND BINDING ADJUDICATION ON THAT FILER AS
 TO THE PATENT'S SCOPE, ENFORCEABILITY, AND INFRINGEMENT.
 S. 4370--A                          5
 
   3. IN DETERMINING WHETHER THE PARTIES TO THE AGREEMENT HAVE MET  THEIR
 BURDEN  UNDER  PARAGRAPH (C) OF SUBDIVISION ONE OF THIS SECTION, A COURT
 OF COMPETENT JURISDICTION SHALL PRESUME THAT THE RELEVANT PRODUCT MARKET
 IS THAT MARKET CONSISTING OF THE BRAND OR REFERENCE DRUG OF THE  COMPANY
 ALLEGING  PATENT  INFRINGEMENT  AND THE DRUG PRODUCT OF THE NONREFERENCE
 DRUG FILER ACCUSED OF INFRINGEMENT AND ANY OTHER BIOLOGICAL PRODUCT THAT
 IS LICENSED AS BIOSIMILAR OR IS AN AB-RATED  GENERIC  TO  THE  REFERENCE
 PRODUCT.
   4.  (A) THIS SECTION SHALL NOT MODIFY, IMPAIR, LIMIT, OR SUPERSEDE THE
 APPLICABILITY OF THE ANTITRUST LAWS OF THE  STATE  PURSUANT  TO  ARTICLE
 TWENTY-TWO  OF  THE GENERAL BUSINESS LAW, UNFAIR COMPETITION LAWS OF THE
 STATE PURSUANT TO ARTICLE TWENTY-TWO-A OF THE GENERAL  BUSINESS  LAW  OR
 THE  AVAILABILITY  OF DAMAGES OR REMEDIES PROVIDED THEREIN. THIS SECTION
 SHALL NOT MODIFY, IMPAIR, LIMIT, OR SUPERSEDE  THE  RIGHT  OF  ANY  DRUG
 COMPANY  APPLICANT TO ASSERT CLAIMS OR COUNTERCLAIMS AGAINST ANY PERSON,
 UNDER THE ANTITRUST LAWS OR OTHER LAWS RELATING TO UNFAIR COMPETITION OF
 THE FEDERAL ANTITRUST LAW OR STATE LAW.
   (B) IF ANY PROVISION OF THIS SUBDIVISION, AN AMENDMENT  MADE  TO  THIS
 SUBDIVISION,  OR  THE  APPLICATION  OF ANY PROVISION OR AMENDMENT TO ANY
 PERSON OR CIRCUMSTANCE IS HELD TO BE UNCONSTITUTIONAL, THE REMAINDER  OF
 THIS  SUBDIVISION,  THE  AMENDMENTS  MADE  TO  THIS SUBDIVISION, AND THE
 APPLICATION OF THE PROVISIONS OF THIS SUBDIVISION OR AMENDMENTS  TO  ANY
 PERSON OR CIRCUMSTANCE SHALL NOT BE AFFECTED.
   5.  (A)(I)  EACH  PERSON  THAT VIOLATES OR ASSISTS IN THE VIOLATION OF
 THIS SECTION SHALL FORFEIT AND PAY TO THE STATE A CIVIL  PENALTY  SUFFI-
 CIENT TO DETER VIOLATIONS OF THIS SECTION, AS FOLLOWS:
   (A)  IF THE PERSON WHO VIOLATED THIS SECTION RECEIVED ANY VALUE DUE TO
 THAT VIOLATION, AN AMOUNT UP TO THREE TIMES THE VALUE  RECEIVED  BY  THE
 PARTY  THAT IS REASONABLY ATTRIBUTABLE TO THE VIOLATION OF THIS SECTION,
 OR TWENTY MILLION DOLLARS, WHICHEVER IS GREATER; OR
   (B) IF THE VIOLATOR HAS NOT RECEIVED ANYTHING OF VALUE AS DESCRIBED IN
 THIS SUBPARAGRAPH, AN AMOUNT UP TO THREE TIMES THE VALUE GIVEN TO  OTHER
 PARTIES  TO  THE  AGREEMENT  REASONABLY ATTRIBUTABLE TO THE VIOLATION OF
 THIS SECTION, OR TWENTY MILLION DOLLARS.
   (C) FOR PURPOSES OF THIS SUBDIVISION, "REASONABLY ATTRIBUTABLE TO  THE
 VIOLATION"  SHALL  BE  DETERMINED BY THE STATE'S SHARE OF THE MARKET FOR
 THE BRAND DRUG AT ISSUE IN THE AGREEMENT.
   (II) ANY PENALTY DESCRIBED IN SUBPARAGRAPH (I) OF THIS PARAGRAPH SHALL
 ACCRUE ONLY TO THE STATE AND  SHALL  BE  RECOVERED  IN  A  CIVIL  ACTION
 BROUGHT BY THE ATTORNEY GENERAL IN ITS OWN NAME, OR BY ANY OF ITS ATTOR-
 NEYS  DESIGNATED  BY IT FOR THAT PURPOSE, AGAINST ANY PARTY TO AN AGREE-
 MENT THAT VIOLATES THIS SECTION.
   (B) EACH PARTY THAT VIOLATES OR  ASSISTS  IN  THE  VIOLATION  OF  THIS
 SECTION SHALL BE LIABLE FOR ANY DAMAGES, PENALTIES, COSTS, FEES, INJUNC-
 TIONS,  OR OTHER EQUITABLE OR LEGAL REMEDIES, INCLUDING, BUT NOT LIMITED
 TO, RESTITUTION AND DISGORGEMENT, THAT MAY BE JUST AND REASONABLE.  SUCH
 REMEDIES SHALL INCLUDE, BUT NOT BE  LIMITED  TO,  ANY  REMEDY  AVAILABLE
 UNDER  ARTICLES  TWENTY-TWO  OR TWENTY-TWO-A OF THE GENERAL BUSINESS LAW
 AND SECTION SIXTY-THREE OF THE EXECUTIVE LAW.
   (C) IF THE STATE IS AWARDED PENALTIES UNDER SUBPARAGRAPH (I) OF  PARA-
 GRAPH  (A)  OF THIS SUBDIVISION, IT SHALL NOT RECOVER PENALTIES PURSUANT
 TO ANOTHER LAW IDENTIFIED IN PARAGRAPH (B)  OF  THIS  SUBDIVISION.  THIS
 SECTION SHALL NOT BE CONSTRUED TO FORECLOSE THE STATE'S ABILITY TO CLAIM
 ANY  EQUITABLE OR LEGAL REMEDY AVAILABLE IN PARAGRAPH (B) OF THIS SUBDI-
 VISION.
 S. 4370--A                          6
 
   (D) AN ACTION TO ENFORCE A CAUSE OF ACTION FOR  A  VIOLATION  OF  THIS
 SECTION  SHALL  BE  COMMENCED WITHIN SIX YEARS AFTER THE CAUSE OF ACTION
 ACCRUED.
   § 2. Severability clause. If any clause, sentence, paragraph, subdivi-
 sion,  section  or  part  of  this act shall be adjudged by any court of
 competent jurisdiction to be invalid  or  unenforceable,  such  judgment
 shall not affect, impair, or invalidate the remainder thereof, but shall
 be  confined in its operation to the clause, sentence, paragraph, subdi-
 vision, section or part thereof directly involved in the controversy  in
 which  such  judgment shall have been rendered. It is hereby declared to
 be the intent of the legislature that this act would have  been  enacted
 even if such invalid provisions had not been included herein.
   §  3.  This  act  shall take effect on the sixtieth day after it shall
 have become a law.

co-Sponsors

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2021-S4370B (ACTIVE) - Details

See Assembly Version of this Bill:: A7245
Current Committee:: Senate Rules
Law Section:: Public Health Law
Laws Affected:: Add Art 2-A Title IV §§282 & 283, Pub Health L
Versions Introduced in 2023-2024 Legislative Session:: S4513, A7465

2021-S4370B (ACTIVE) - Summary

2021-S4370B (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S4370B

SPONSOR: BIAGGI
 
TITLE OF BILL:

An act to amend the public health law, in relation to preserving access
to affordable drugs

 
PURPOSE OF BILL:

To preserve access to affordable prescription drugs by banning pay-to-
delay agreements.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 amends Article 2-a of the public health law by adding a new
title IV to preserve access to prescription drugs by banning pay-to-de-
lay agreements.

Section 2 establishes that if any clause, sentence, paragraph, subdivi-
sion, section or part is found to be invalid or unenforceable, the judg-
ment will not invalidate the remainder of the bill.

Section 3 establishes the effective date.

 
JUSTIFICATION:

Rising prescription drug prices have been devastating to New Yorkers who
depend on prescription drugs to keep them healthy. The growing number of
brand-name and specialty drugs with prices of $100,000 or more has led
many to question whether the costs associated with these products are
defensible or sustainable. The timely availability of generic and biosi-
milar drugs, which increase competition and help lower prices, play an
important role in addressing these concerns.

Brand-name drug manufacturers often file patent infringement lawsuits
against the first generic drug manufacturers to seek FDA approval for
competing generic drugs. Rather than face the costs and uncertainty
associated with litigation, some brand-name and generic drug manufactur-
ers choose to enter into what is known as a pay-for-delay agreement,
where the brand-name drug manufacturers compensates the generic drug
manufacturer for keeping its product off the market for a certain amount
of time. These agreements can be particularly problematic when they
involve the first-to-file generic manufacturer, because no other generic
manufacturer can enter the market until the first-to-file manufacturer
has marketed its product for 180 days.

These pay-for-delay agreements provide financial benefits to drug
manufacturers at the expense of consumers; the brand-name manufacturer
can continue to charge monopoly prices, and the generic company is
compensated for its inaction. The Federal Trade Commission (FTC) esti-
mates that pay-for delay agreements cost American consumers $3.5 billion
per year.

The FTC has found that pay-for-delay agreements prohibit generic entry
for an average of nearly 17 months longer than patent settlement agree-
ments without such payments. In the meantime, consumers must continue
paying brand-name drug prices, which can be as much as 85 percent higher
than the prices of their generic drug counterparts.  Any delay in gener-
ic entry results in a longer period of purchases at the full brand price
and, correspondingly, fewer purchases at less expensive generic prices.
This negatively impacts both consumers and other payers, including
taxpayer-funded health programs, such as Medicaid.

Generic drugs have proven to be one of the safest and most effective
ways for consumers to lower their prescription drug costs, and the use
of generic drugs has been steadily increasing. These drugs should not be
delayed from entering the marketplace.

Patients in New York -- and around the country -- are facing unaccepta-
ble costs and a lack of transparency about how medication is priced. For
too long we have allowed pharmaceutical companies to operate under lax
regulations at the expense of patients. This bill makes it the presump-
tion that an agreement resolving or settling a patent infringement claim
in connection to the sale of a pharmaceutical product has anti-competi-
tive effects if 1) a non reference drug filer receives anything of value
from another company asserting patent infringement and 2) the non refer-
ence drug filer agrees to forego research, development, manufacturing,
marketing, or sale of the drug for a period of time. The legislation
sets forth civil penalties for individuals who violate or assist in
violating this section to ensure compliance.

 
PRIOR LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect on the sixtieth day after it shall have
become a law.

2021-S4370B (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  4370--B
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             February 3, 2021
                                ___________
 
 Introduced  by  Sens.  BIAGGI, BROOKS, BROUK, COMRIE, GAUGHRAN, HOYLMAN,
   LIU, MANNION, MAY, MYRIE, RAMOS -- read twice and ordered printed, and
   when printed to be committed to the Committee on Health -- recommitted
   to the Committee on Health in accordance with Senate Rule 6, sec. 8 --
   committee discharged, bill amended, ordered reprinted as  amended  and
   recommitted  to  said committee -- committee discharged, bill amended,
   ordered reprinted as amended and recommitted to said committee
 
 AN ACT to amend the public health law, in relation to preserving  access
   to affordable drugs
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Article 2-A of the public health law is amended by adding a
 new title IV to read as follows:
                                 TITLE IV
                   PRESERVING ACCESS TO AFFORDABLE DRUGS
 SECTION 282. DEFINITIONS.
         283. PRESERVING ACCESS TO AFFORDABLE DRUGS.
   § 282. DEFINITIONS. FOR THE PURPOSES  OF  THIS  TITLE,  THE  FOLLOWING
 TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   1.  "ANDA" SHALL MEAN ABBREVIATED NEW DRUG APPLICATION AS DESCRIBED BY
 505(J) OF THE FEDERAL FOOD, DRUG, AND COSMETIC ACT, 21 U.S.C. 335(J).
   2. "ANDA FILER" SHALL MEAN A PARTY THAT OWNS OR CONTROLS AN ANDA FILED
 WITH THE FEDERAL FOOD AND  DRUG  ADMINISTRATION  OR  HAS  THE  EXCLUSIVE
 RIGHTS UNDER THAT ANDA TO DISTRIBUTE THE ANDA PRODUCT.
   3.  "AGREEMENT" SHALL MEAN ANYTHING THAT WOULD CONSTITUTE AN AGREEMENT
 UNDER STATE LAW.
   4. "AGREEMENT RESOLVING  OR  SETTLING  A  PATENT  INFRINGEMENT  CLAIM"
 INCLUDES  ANY  AGREEMENT  THAT IS ENTERED INTO WITHIN THIRTY DAYS OF THE
 RESOLUTION OR THE SETTLEMENT OF THE CLAIM, OR ANY OTHER  AGREEMENT  THAT
 IS CONTINGENT UPON, PROVIDES A CONTINGENT CONDITION FOR, OR IS OTHERWISE

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD04644-04-2
 S. 4370--B                          2

 
 RELATED  TO  THE  RESOLUTION  OR  SETTLEMENT  OF  THE  CLAIM. THIS SHALL
 INCLUDE, BUT IS NOT LIMITED TO, THE FOLLOWING:
   (A) ANY AGREEMENT REQUIRED TO BE PROVIDED TO THE FEDERAL TRADE COMMIS-
 SION  OR  THE  ANTITRUST  DIVISION  OF  THE  UNITED STATES DEPARTMENT OF
 JUSTICE UNDER THE MEDICARE PRESCRIPTION DRUG, IMPROVEMENT,  AND  MODERN-
 IZATION ACT OF 2003, PUB. L. NO. 108-173;
   (B)  ANY  AGREEMENT  BETWEEN  A  BIOSIMILAR OR INTERCHANGEABLE PRODUCT
 APPLICANT AND A REFERENCE PRODUCT  SPONSOR  UNDER  THE  BIOLOGICS  PRICE
 COMPETITION  AND  INNOVATION  ACT  OF  2009,  PUB.  L. NO. 111-148, THAT
 RESOLVES PATENT CLAIMS BETWEEN THE APPLICANT AND SPONSOR.
   5. "BIOSIMILAR BIOLOGICAL PRODUCT  APPLICATION  FILER"  SHALL  MEAN  A
 PARTY  THAT OWNS OR CONTROLS A BIOSIMILAR BIOLOGICAL PRODUCT APPLICATION
 FILED WITH THE FEDERAL FOOD AND DRUG ADMINISTRATION PURSUANT TO  SECTION
 351(K) OF THE PUBLIC HEALTH SERVICE ACT, 42 U.S.C. 262(K), FOR LICENSURE
 OF  A  BIOLOGICAL  PRODUCT  AS BIOSIMILAR TO, OR INTERCHANGEABLE WITH, A
 REFERENCE PRODUCT, OR THAT HAS THE EXCLUSIVE RIGHTS UNDER  THE  APPLICA-
 TION TO DISTRIBUTE THE BIOSIMILAR BIOLOGICAL PRODUCT.
   6. "NDA" SHALL MEAN A NEW DRUG APPLICATION.
   7. "NONREFERENCE DRUG FILER" SHALL MEAN EITHER:
   (A) AN ANDA FILER;
   (B)  A COMPANY THAT SEEKS AN ABBREVIATED APPROVAL PATHWAY FOR ITS DRUG
 PRODUCT UNDER 505(B)(2) OF THE FEDERAL FOOD, DRUG, AND  COSMETIC ACT, 21
 U.S.C. 355(B)(2); OR
   (C) A BIOSIMILAR BIOLOGICAL  PRODUCT  APPLICATION  FILER,  OR  COMPANY
 SEEKING FDA APPROVAL FOR A BIOSIMILAR UNDER 42 U.S.C. 262.
   8.  "NONREFERENCE  DRUG PRODUCT" SHALL MEAN THE PRODUCT TO BE MANUFAC-
 TURED UNDER AN ANDA OR AN APPLICATION FILED UNDER SECTION  505(B)(2)  OF
 THE  FEDERAL FOOD, DRUG, AND COSMETIC ACT, 21 U.S.C. 355(B), THAT IS THE
 SUBJECT OF THE PATENT INFRINGEMENT CLAIM, A BIOSIMILAR BIOLOGICAL  PROD-
 UCT  THAT IS THE PRODUCT TO BE MANUFACTURED UNDER THE BIOSIMILAR BIOLOG-
 ICAL PRODUCT APPLICATION THAT IS THE SUBJECT OF THE PATENT  INFRINGEMENT
 CLAIM, OR BOTH.
   9.  "PATENT  INFRINGEMENT" SHALL MEAN INFRINGEMENT OF ANY PATENT OR OF
 ANY FILED PATENT APPLICATION,  EXTENSION,  REISSUE,  RENEWAL,  DIVISION,
 CONTINUATION,  CONTINUATION IN PART, REEXAMINATION, PATENT TERM RESTORA-
 TION, PATENTS OF ADDITION, AND EXTENSIONS THEREOF.
   10. "PATENT INFRINGEMENT CLAIM" SHALL MEAN ANY ALLEGATION  MADE  TO  A
 NONREFERENCE  DRUG  FILER,  WHETHER OR NOT INCLUDED IN A COMPLAINT FILED
 WITH A COURT OF LAW, THAT ITS NONREFERENCE DRUG PRODUCT  OR  APPLICATION
 INFRINGES  ANY PATENT HELD BY, OR EXCLUSIVELY LICENSED TO, THE REFERENCE
 DRUG HOLDER.
   11. "REFERENCE DRUG HOLDER" SHALL MEAN EITHER:
   (A) A BRAND HOLDER THAT IS ANY OF THE FOLLOWING:
   (I) THE HOLDER OF AN APPROVED NDA FOR A DRUG PRODUCT APPLICATION FILED
 UNDER SECTION 505(B) OF THE FEDERAL FOOD, DRUG,  AND  COSMETIC  ACT,  21
 U.S.C. 355(B);
   (II)  A  PERSON OWNING OR CONTROLLING ENFORCEMENT OF THE PATENT LISTED
 IN THE APPROVED DRUG PRODUCTS WITH THERAPEUTIC  EQUIVALENCE  EVALUATIONS
 IN CONNECTION WITH THE NDA; OR
   (III)  THE  PREDECESSORS,  SUBSIDIARIES, DIVISIONS, GROUPS, AND AFFIL-
 IATES CONTROLLED BY, CONTROLLING, OR UNDER COMMON CONTROL WITH,  ANY  OF
 THE  ENTITIES  DESCRIBED  IN SUBPARAGRAPH (I) OR (II) OF THIS PARAGRAPH,
 WITH CONTROL TO BE PRESUMED BY DIRECT OR  INDIRECT  SHARE  OWNERSHIP  OF
 FIFTY  PERCENT  OR GREATER, AS WELL AS THE LICENSEES, LICENSORS, SUCCES-
 SORS, AND ASSIGNS OF EACH OF THOSE ENTITIES; OR
 S. 4370--B                          3
 
   (B) A BIOLOGICAL PRODUCT LICENSE HOLDER, WHICH SHALL MEAN ANY  OF  THE
 FOLLOWING:
   (I)  THE  HOLDER OF AN APPROVED BIOLOGICAL PRODUCT LICENSE APPLICATION
 FOR A BIOLOGICAL DRUG PRODUCT UNDER SECTION 351(A) OF THE PUBLIC  HEALTH
 SERVICE ACT, 42 U.S.C. 262(A);
   (II)  A  PERSON  OWNING OR CONTROLLING ENFORCEMENT OF ANY PATENTS THAT
 CLAIM THE BIOLOGICAL PRODUCT THAT IS THE SUBJECT OF THE APPROVED BIOLOG-
 ICAL PATENT LICENSE APPLICATION; OR
   (III) THE PREDECESSORS, SUBSIDIARIES, DIVISIONS,  GROUPS,  AND  AFFIL-
 IATES  CONTROLLED  BY, CONTROLLING, OR UNDER COMMON CONTROL WITH, ANY OF
 THE ENTITIES DESCRIBED IN SUBPARAGRAPH (I) OR (II)  OF  THIS  PARAGRAPH,
 WITH  CONTROL  TO  BE  PRESUMED BY DIRECT OR INDIRECT SHARE OWNERSHIP OF
 FIFTY PERCENT OR GREATER, AS WELL AS THE LICENSEES,  LICENSORS,  SUCCES-
 SORS, AND ASSIGNS OF EACH OF THOSE ENTITIES.
   12. "REFERENCE DRUG PRODUCT" SHALL MEAN THE PRODUCT TO BE MANUFACTURED
 BY  THE REFERENCE DRUG HOLDER AND INCLUDES BOTH BRANDED DRUGS OF THE NDA
 HOLDER AND THE BIOLOGIC DRUG PRODUCT OF  THE  BIOLOGIC  PRODUCT  LICENSE
 APPLICANT.
   13.  "STATUTORY  EXCLUSIVITY"  SHALL  MEAN  THOSE  PROHIBITIONS ON THE
 APPROVAL OF DRUG APPLICATIONS UNDER CLAUSES (II) THROUGH (IV) OF SECTION
 505(C)(3)(E), SECTION 527 OR SECTION 505A OF THE FEDERAL FOOD, DRUG, AND
 COSMETIC ACT, 21 U.S.C. 355(C)(3)(E), ON  THE  LICENSING  OF  BIOLOGICAL
 PRODUCT  APPLICATIONS  UNDER SECTION 262(K)(7) OF TITLE 42 OF THE UNITED
 STATES CODE OR SECTION 262(M)(2) OR (3) OF TITLE 42 OF THE UNITED STATES
 CODE.
   § 283. PRESERVING  ACCESS  TO  AFFORDABLE  DRUGS.  1.  (A)  EXCEPT  AS
 PROVIDED IN PARAGRAPH (C) OF THIS SUBDIVISION, AN AGREEMENT RESOLVING OR
 SETTLING,  ON  A FINAL OR INTERIM BASIS, A PATENT INFRINGEMENT CLAIM, IN
 CONNECTION WITH THE SALE OF A PHARMACEUTICAL PRODUCT, SHALL BE  PRESUMED
 TO HAVE ANTICOMPETITIVE EFFECTS AND SHALL BE A VIOLATION OF THIS SECTION
 IF BOTH OF THE FOLLOWING APPLY:
   (I)  A NONREFERENCE DRUG FILER RECEIVES ANYTHING OF VALUE FROM ANOTHER
 COMPANY ASSERTING PATENT INFRINGEMENT, INCLUDING, BUT NOT LIMITED TO, AN
 EXCLUSIVE LICENSE OR A PROMISE THAT THE BRAND COMPANY WILL NOT LAUNCH AN
 AUTHORIZED GENERIC VERSION OF ITS BRAND DRUG; AND
   (II) THE NONREFERENCE DRUG FILER AGREES TO LIMIT OR  FOREGO  RESEARCH,
 DEVELOPMENT, MANUFACTURING, MARKETING, OR SALES OF THE NONREFERENCE DRUG
 FILER'S PRODUCT FOR ANY PERIOD OF TIME.
   (B)  AS USED IN SUBPARAGRAPH (I) OF PARAGRAPH (A) OF THIS SUBDIVISION,
 "ANYTHING OF VALUE" SHALL BE INTERPRETED BROADLY TO INCLUDE ANY TYPE  OF
 CONSIDERATION,  VALUE OR BENEFIT A REFERENCE DRUG HOLDER OR NONREFERENCE
 DRUG FILER COULD POSSIBLY OBTAIN FROM THE AGREEMENT. "ANYTHING OF VALUE"
 SHALL NOT INCLUDE A SETTLEMENT OF PATENT INFRINGEMENT  CLAIMS  IN  WHICH
 THE  CONSIDERATION GRANTED BY THE REFERENCE DRUG HOLDER TO THE NONREFER-
 ENCE DRUG FILER AS PART OF THE RESOLUTION OR SETTLEMENT CONSISTS OF ONLY
 ONE OR MORE OF THE FOLLOWING:
   (I) THE RIGHT TO MARKET THE COMPETING PRODUCT  IN  THE  UNITED  STATES
 BEFORE THE EXPIRATION OF EITHER:
   (A) A PATENT THAT IS THE BASIS FOR THE PATENT INFRINGEMENT CLAIM; OR
   (B)  A  PATENT RIGHT OR OTHER STATUTORY EXCLUSIVITY THAT WOULD PREVENT
 THE MARKETING OF THE DRUG;
   (II) A COVENANT NOT TO SUE ON A CLAIM THAT THE NONREFERENCE DRUG PROD-
 UCT INFRINGES A UNITED STATES PATENT;
   (III) COMPENSATION FOR SAVED REASONABLE FUTURE LITIGATION EXPENSES  OF
 THE REFERENCE DRUG HOLDER BUT ONLY IF BOTH OF THE FOLLOWING ARE TRUE:
 S. 4370--B                          4
 
   (A)  THE TOTAL COMPENSATION FOR SAVED LITIGATION EXPENSES IS REFLECTED
 IN BUDGETS THAT THE REFERENCE DRUG  HOLDER  DOCUMENTED  AND  ADOPTED  AT
 LEAST SIX MONTHS BEFORE THE SETTLEMENT; AND
   (B) THE COMPENSATION SHALL NOT EXCEED THE LOWER OF THE FOLLOWING:
   (1) SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS; OR
   (2)  FIVE  PERCENT  OF  THE  REVENUE  THAT THE NONREFERENCE DRUG FILER
 PROJECTED OR FORECASTED IT WOULD RECEIVE IN THE  FIRST  THREE  YEARS  OF
 SALES  OF  ITS  VERSION OF THE REFERENCE DRUG DOCUMENTED AT LEAST TWELVE
 MONTHS BEFORE THE SETTLEMENT. IF NO PROJECTIONS OR FORECASTS ARE  AVAIL-
 ABLE,  THE  COMPENSATION  SHALL  NOT  EXCEED  TWO HUNDRED FIFTY THOUSAND
 DOLLARS;
   (IV) AN AGREEMENT BY THE REFERENCE DRUG HOLDER NOT TO  INTERFERE  WITH
 THE  NONREFERENCE DRUG FILER'S ABILITY TO SECURE AND MAINTAIN REGULATORY
 APPROVAL TO MARKET THE NONREFERENCE DRUG  PRODUCT  OR  AN  AGREEMENT  TO
 FACILITATE  THE NONREFERENCE DRUG FILER'S ABILITY TO SECURE AND MAINTAIN
 REGULATORY APPROVAL TO MARKET THE NONREFERENCE DRUG PRODUCT; OR
   (V) AN AGREEMENT RESOLVING A PATENT INFRINGEMENT CLAIM  IN  WHICH  THE
 REFERENCE  DRUG  HOLDER  FORGIVES  THE  POTENTIAL  DAMAGES  ACCRUED BY A
 NONREFERENCE DRUG FILER FOR AN AT-RISK LAUNCH OF THE  NONREFERENCE  DRUG
 PRODUCT THAT IS THE SUBJECT OF THAT CLAIM.
   (C)  PARTIES  TO AN AGREEMENT ARE NOT IN VIOLATION OF PARAGRAPH (A) OF
 THIS SUBDIVISION  IF  THEY  CAN  DEMONSTRATE  BY  CLEAR  AND  CONVINCING
 EVIDENCE THAT EITHER OF THE FOLLOWING ARE MET:
   (I)  THE  VALUE  RECEIVED  BY THE NONREFERENCE DRUG FILER DESCRIBED IN
 SUBPARAGRAPH (I) OF PARAGRAPH (A) OF THIS  SUBDIVISION  IS  A  FAIR  AND
 REASONABLE  COMPENSATION  SOLELY  FOR  OTHER  GOODS OR SERVICES THAT THE
 NONREFERENCE DRUG FILER HAS PROMISED TO PROVIDE; OR
   (II) THE AGREEMENT HAS DIRECTLY GENERATED PROCOMPETITIVE BENEFITS  AND
 THE  PROCOMPETITIVE  BENEFITS  OF THE AGREEMENT OUTWEIGH THE ANTICOMPET-
 ITIVE EFFECTS OF THE AGREEMENT.
   2. IN DETERMINING WHETHER THE PARTIES TO THE AGREEMENT HAVE MET  THEIR
 BURDEN  UNDER  PARAGRAPH (C) OF SUBDIVISION ONE OF THIS SECTION, A COURT
 OF COMPETENT JURISDICTION SHALL NOT CONSIDER ANY OF THE FOLLOWING:
   (A) THAT ENTRY INTO THE MARKETPLACE COULD NOT HAVE OCCURRED UNTIL  THE
 EXPIRATION  OF  THE  RELEVANT PATENT EXCLUSIVITY OR THAT THE AGREEMENT'S
 PROVISION FOR ENTRY OF THE NONREFERENCE DRUG PRODUCT BEFORE THE  EXPIRA-
 TION  OF  ANY  PATENT EXCLUSIVITY MEANS THAT THE AGREEMENT IS PROCOMPET-
 ITIVE WITHIN THE MEANING OF SUBPARAGRAPH (II) OF PARAGRAPH (C) OF SUBDI-
 VISION ONE OF THIS SECTION;
   (B) THAT ANY PATENT IS ENFORCEABLE AND INFRINGED BY  THE  NONREFERENCE
 DRUG  FILER  IN THE ABSENCE OF A FINAL ADJUDICATION BINDING ON THE FILER
 OF THOSE ISSUES;
   (C) THAT THE AGREEMENT CAUSED NO DELAY IN ENTRY  OF  THE  NONREFERENCE
 DRUG  FILER'S  DRUG PRODUCT BECAUSE OF THE LACK OF FEDERAL FOOD AND DRUG
 ADMINISTRATION (FDA) APPROVAL OF THAT OR OF  ANOTHER  NONREFERENCE  DRUG
 PRODUCT; OR
   (D)  THAT THE AGREEMENT CAUSED NO HARM OR DELAY DUE TO THE POSSIBILITY
 THAT THE NONREFERENCE DRUG FILER'S  DRUG  PRODUCT  MIGHT  INFRINGE  SOME
 PATENT THAT HAS NOT BEEN ASSERTED AGAINST THE NONREFERENCE DRUG FILER OR
 THAT IS NOT SUBJECT TO A FINAL AND BINDING ADJUDICATION ON THAT FILER AS
 TO THE PATENT'S SCOPE, ENFORCEABILITY, AND INFRINGEMENT.
   3.  IN DETERMINING WHETHER THE PARTIES TO THE AGREEMENT HAVE MET THEIR
 BURDEN UNDER PARAGRAPH (C) OF SUBDIVISION ONE OF THIS SECTION,  A  COURT
 OF COMPETENT JURISDICTION SHALL PRESUME THAT THE RELEVANT PRODUCT MARKET
 IS  THAT MARKET CONSISTING OF THE REFERENCE DRUG OF THE COMPANY ALLEGING
 PATENT INFRINGEMENT AND THE DRUG PRODUCT OF THE NONREFERENCE DRUG  FILER
 S. 4370--B                          5
 
 ACCUSED  OF  INFRINGEMENT  AND  ANY  OTHER  BIOLOGICAL  PRODUCT  THAT IS
 LICENSED AS BIOSIMILAR OR IS AN AB-RATED GENERIC TO THE REFERENCE  PROD-
 UCT.
   4.  (A) THIS SECTION SHALL NOT MODIFY, IMPAIR, LIMIT, OR SUPERSEDE THE
 APPLICABILITY OF THE ANTITRUST LAWS OF THE  STATE  PURSUANT  TO  ARTICLE
 TWENTY-TWO  OF  THE GENERAL BUSINESS LAW, UNFAIR COMPETITION LAWS OF THE
 STATE PURSUANT TO ARTICLE TWENTY-TWO-A OF THE GENERAL  BUSINESS  LAW  OR
 THE  AVAILABILITY  OF DAMAGES OR REMEDIES PROVIDED THEREIN. THIS SECTION
 SHALL NOT MODIFY, IMPAIR, LIMIT, OR SUPERSEDE  THE  RIGHT  OF  ANY  DRUG
 COMPANY  APPLICANT TO ASSERT CLAIMS OR COUNTERCLAIMS AGAINST ANY PERSON,
 UNDER THE ANTITRUST LAWS OR OTHER LAWS RELATING TO UNFAIR COMPETITION OF
 THE FEDERAL ANTITRUST LAW OR STATE LAW.
   (B) IF ANY PROVISION OF THIS SUBDIVISION, AN AMENDMENT  MADE  TO  THIS
 SUBDIVISION,  OR  THE  APPLICATION  OF ANY PROVISION OR AMENDMENT TO ANY
 PERSON OR CIRCUMSTANCE IS HELD TO BE UNCONSTITUTIONAL, THE REMAINDER  OF
 THIS  SUBDIVISION,  THE  AMENDMENTS  MADE  TO  THIS SUBDIVISION, AND THE
 APPLICATION OF THE PROVISIONS OF THIS SUBDIVISION OR AMENDMENTS  TO  ANY
 PERSON OR CIRCUMSTANCE SHALL NOT BE AFFECTED.
   5.  (A)(I)  EACH  PERSON  THAT VIOLATES OR ASSISTS IN THE VIOLATION OF
 THIS SECTION SHALL FORFEIT AND PAY TO THE STATE A CIVIL  PENALTY  SUFFI-
 CIENT TO DETER VIOLATIONS OF THIS SECTION, AS FOLLOWS:
   (A)  IF THE PERSON WHO VIOLATED THIS SECTION RECEIVED ANY VALUE DUE TO
 THAT VIOLATION, AN AMOUNT UP TO THREE TIMES THE VALUE  RECEIVED  BY  THE
 PARTY  THAT IS REASONABLY ATTRIBUTABLE TO THE VIOLATION OF THIS SECTION,
 OR TWENTY MILLION DOLLARS, WHICHEVER IS GREATER; OR
   (B) IF THE VIOLATOR HAS NOT RECEIVED ANYTHING OF VALUE AS DESCRIBED IN
 THIS SUBPARAGRAPH, AN AMOUNT UP TO THREE TIMES THE VALUE GIVEN TO  OTHER
 PARTIES  TO  THE  AGREEMENT  REASONABLY ATTRIBUTABLE TO THE VIOLATION OF
 THIS SECTION, OR TWENTY MILLION DOLLARS.
   (C) FOR PURPOSES OF THIS SUBDIVISION, "REASONABLY ATTRIBUTABLE TO  THE
 VIOLATION"  SHALL  BE  DETERMINED BY THE STATE'S SHARE OF THE MARKET FOR
 THE BRAND DRUG AT ISSUE IN THE AGREEMENT.
   (II) ANY PENALTY DESCRIBED IN SUBPARAGRAPH (I) OF THIS PARAGRAPH SHALL
 ACCRUE ONLY TO THE STATE AND  SHALL  BE  RECOVERED  IN  A  CIVIL  ACTION
 BROUGHT BY THE ATTORNEY GENERAL IN ITS OWN NAME, OR BY ANY OF ITS ATTOR-
 NEYS  DESIGNATED  BY IT FOR THAT PURPOSE, AGAINST ANY PARTY TO AN AGREE-
 MENT THAT VIOLATES THIS SECTION.
   (B) EACH PARTY THAT VIOLATES OR  ASSISTS  IN  THE  VIOLATION  OF  THIS
 SECTION SHALL BE LIABLE FOR ANY DAMAGES, PENALTIES, COSTS, FEES, INJUNC-
 TIONS,  OR OTHER EQUITABLE OR LEGAL REMEDIES, INCLUDING, BUT NOT LIMITED
 TO, RESTITUTION AND DISGORGEMENT, THAT MAY BE JUST AND REASONABLE.  SUCH
 REMEDIES SHALL INCLUDE, BUT NOT BE  LIMITED  TO,  ANY  REMEDY  AVAILABLE
 UNDER  ARTICLES  TWENTY-TWO  OR TWENTY-TWO-A OF THE GENERAL BUSINESS LAW
 AND SECTION SIXTY-THREE OF THE EXECUTIVE LAW.
   (C) IF THE STATE IS AWARDED PENALTIES UNDER SUBPARAGRAPH (I) OF  PARA-
 GRAPH  (A)  OF THIS SUBDIVISION, IT SHALL NOT RECOVER PENALTIES PURSUANT
 TO ANOTHER LAW IDENTIFIED IN PARAGRAPH (B)  OF  THIS  SUBDIVISION.  THIS
 SECTION SHALL NOT BE CONSTRUED TO FORECLOSE THE STATE'S ABILITY TO CLAIM
 ANY  EQUITABLE OR LEGAL REMEDY AVAILABLE IN PARAGRAPH (B) OF THIS SUBDI-
 VISION.
   (D) AN ACTION TO ENFORCE A CAUSE OF ACTION FOR  A  VIOLATION  OF  THIS
 SECTION  SHALL  BE  COMMENCED WITHIN SIX YEARS AFTER THE CAUSE OF ACTION
 ACCRUED.
   § 2. Severability clause. If any clause, sentence, paragraph, subdivi-
 sion, section or part of this act shall be  adjudged  by  any  court  of
 competent  jurisdiction  to  be  invalid or unenforceable, such judgment
 S. 4370--B                          6
 
 shall not affect, impair, or invalidate the remainder thereof, but shall
 be confined in its operation to the clause, sentence, paragraph,  subdi-
 vision,  section or part thereof directly involved in the controversy in
 which  such  judgment shall have been rendered. It is hereby declared to
 be the intent of the legislature that this act would have  been  enacted
 even if such invalid provisions had not been included herein.
   §  3.  This  act  shall take effect on the sixtieth day after it shall
 have become a law.

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Senate Bill S4370B

Sponsored By

Archive: Last Bill Status - In Senate Committee Rules Committee

May 9, 2022 - Health Committee Vote

Health Committee Vote: May 9, 2022

Bill Amendments

co-Sponsors

2021-S4370 - Details

2021-S4370 - Summary

2021-S4370 - Sponsor Memo

2021-S4370 - Bill Text download pdf

co-Sponsors

2021-S4370A - Details

2021-S4370A - Summary

2021-S4370A - Sponsor Memo

2021-S4370A - Bill Text download pdf

co-Sponsors

2021-S4370B (ACTIVE) - Details

2021-S4370B (ACTIVE) - Summary

2021-S4370B (ACTIVE) - Sponsor Memo

2021-S4370B (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S4370B

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Sponsored By

Archive: Last Bill Status - In Senate Committee Rules Committee

Bill Amendments

co-Sponsors

2021-S4370 - Details

2021-S4370 - Summary

2021-S4370 - Sponsor Memo

2021-S4370 - Bill Text download pdf

co-Sponsors

2021-S4370A - Details

2021-S4370A - Summary

2021-S4370A - Sponsor Memo

2021-S4370A - Bill Text download pdf

co-Sponsors

2021-S4370B (ACTIVE) - Details

2021-S4370B (ACTIVE) - Summary

2021-S4370B (ACTIVE) - Sponsor Memo

2021-S4370B (ACTIVE) - Bill Text download pdf

Comments