The Preserve Access to Affordable Generics Act (S. 2019) was introduced last week as the latest attempt to address pharmaceutical patent settlement agreements (aka “reverse payment agreements” or “pay-for-delay agreements”). It’s also the first attempt by Congress to pass such legislation following the U.S. Supreme Court declined to hold, in FTC v. Actavis, Inc., 133 S. Ct. 2233 (2013), that reverse payment settlement agreements are presumptively unlawful, and that “Courts reviewing such agreements should proceed by applying the ‘rule of reason,’ rather than under a ‘quick look’ approach.”
The new Senate bill would amend the Federal Trade Commission (FTC) Act to add a new section – Section 27 – to permit the FTC to “initiate a proceeding to enforce the provisions of [new Sec. 27] against the parties to any agreement resolving or settling, on a final or interim basis, a patent infringement claim, in connection with the sale of a drug product” if “an ANDA filer receives anything of value, including an exclusive license” – a new addition to the bill – and if “the ANDA filer agrees to limit or forego research, development, manufacturing, marketing, or sales of the ANDA product for any period of time.”
A report from the FTC in December 2014 identified 29 potential pay-for-delay settlements involving 21 different branded pharmaceutical products, with combined U.S. sales of approximately $4.3 billion. Read more here.