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A07465 Summary:

BILL NOA07465
 
SAME ASSAME AS S04513
 
SPONSORKelles
 
COSPNSRRivera, Davila, Burdick, Simon, Sillitti, Epstein, Rosenthal L, Wallace, Lupardo, Gonzalez-Rojas, Paulin, Thiele, Bichotte Hermelyn, Steck, Stirpe, Smith, Reyes, Forrest, Lavine, Jean-Pierre, Jackson, Gunther, Hevesi, Dinowitz, Mamdani, Glick, Santabarbara, Stern, Levenberg, Septimo
 
MLTSPNSR
 
Add Art 2-A Title IV 282 & 283, Pub Health L
 
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.
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A07465 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          7465
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                      May 24, 2023
                                       ___________
 
        Introduced by M. of A. KELLES, RIVERA, DAVILA, BURDICK, SIMON, SILLITTI,
          EPSTEIN,   L. ROSENTHAL,  WALLACE,  LUPARDO,  GONZALEZ-ROJAS,  PAULIN,
          THIELE,  BICHOTTE HERMELYN,  STECK,  STIRPE,  SMITH,  REYES,  FORREST,
          LAVINE,  JEAN-PIERRE,  JACKSON,  GUNTHER,  HEVESI,  DINOWITZ, MAMDANI,
          GLICK -- read once and referred 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:
 
     1    Section 1. Article 2-A of the public health law is amended by adding a
     2  new title IV to read as follows:
     3                                  TITLE IV
     4                    PRESERVING ACCESS TO AFFORDABLE DRUGS
     5  Section 282. Definitions.
     6          283. Preserving access to affordable drugs.
     7    § 282. Definitions. For the purposes  of  this  title,  the  following
     8  terms shall have the following meanings:
     9    1.  "ANDA" shall mean abbreviated new drug application as described by
    10  505(j) of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 335(j).
    11    2. "ANDA filer" shall mean a party that owns or controls an ANDA filed
    12  with the federal food and  drug  administration  or  has  the  exclusive
    13  rights under that ANDA to distribute the ANDA product.
    14    3.  "Agreement" shall mean anything that would constitute an agreement
    15  under state law.
    16    4. "Agreement resolving  or  settling  a  patent  infringement  claim"
    17  includes  any  agreement  that is entered into within thirty days of the
    18  resolution or the settlement of the claim, or any other  agreement  that
    19  is contingent upon, provides a contingent condition for, or is otherwise
    20  related  to  the  resolution  or  settlement  of  the  claim. This shall
    21  include, but is not limited to, the following:

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD09108-01-3

        A. 7465                             2
 
     1    (a) Any agreement required to be provided to the federal trade commis-
     2  sion or the antitrust  division  of  the  United  States  Department  of
     3  Justice  under  the Medicare Prescription Drug, Improvement, and Modern-
     4  ization Act of 2003, Pub. L. No. 108-173;
     5    (b)  Any  agreement  between  a  biosimilar or interchangeable product
     6  applicant and a reference product  sponsor  under  the  Biologics  Price
     7  Competition  and  Innovation  Act  of  2009,  Pub.  L. No. 111-148, that
     8  resolves patent claims between the applicant and sponsor.
     9    5. "Biosimilar biological product  application  filer"  shall  mean  a
    10  party  that owns or controls a biosimilar biological product application
    11  filed with the federal food and drug administration pursuant to  section
    12  351(k) of the Public Health Service Act, 42 U.S.C. 262(k), for licensure
    13  of  a  biological  product  as biosimilar to, or interchangeable with, a
    14  reference product, or that has the exclusive rights under  the  applica-
    15  tion to distribute the biosimilar biological product.
    16    6. "NDA" shall mean a new drug application.
    17    7. "Nonreference drug filer" shall mean either:
    18    (a) An ANDA filer;
    19    (b)  A company that seeks an abbreviated approval pathway for its drug
    20  product under 505(b)(2) of the Federal Food, Drug, and  Cosmetic Act, 21
    21  U.S.C. 355(b)(2); or
    22    (c) A biosimilar biological  product  application  filer,  or  company
    23  seeking FDA approval for a biosimilar under 42 U.S.C. 262.
    24    8.  "Nonreference  drug product" shall mean the product to be manufac-
    25  tured under an ANDA or an application filed under section  505(b)(2)  of
    26  the  Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 355(b), that is the
    27  subject of the patent infringement claim, a biosimilar biological  prod-
    28  uct  that is the product to be manufactured under the biosimilar biolog-
    29  ical product application that is the subject of the patent  infringement
    30  claim, or both.
    31    9.  "Patent  infringement" shall mean infringement of any patent or of
    32  any filed patent application,  extension,  reissue,  renewal,  division,
    33  continuation,  continuation in part, reexamination, patent term restora-
    34  tion, patents of addition, and extensions thereof.
    35    10. "Patent infringement claim" shall mean any allegation  made  to  a
    36  nonreference  drug  filer,  whether or not included in a complaint filed
    37  with a court of law, that its nonreference drug product  or  application
    38  infringes  any patent held by, or exclusively licensed to, the reference
    39  drug holder.
    40    11. "Reference drug holder" shall mean either:
    41    (a) A brand holder that is any of the following:
    42    (i) The holder of an approved NDA for a drug product application filed
    43  under section 505(b) of the Federal Food, Drug,  and  Cosmetic  Act,  21
    44  U.S.C. 355(b);
    45    (ii)  A  person owning or controlling enforcement of the patent listed
    46  in the approved drug products with therapeutic  equivalence  evaluations
    47  in connection with the NDA; or
    48    (iii)  The  predecessors,  subsidiaries, divisions, groups, and affil-
    49  iates controlled by, controlling, or under common control with,  any  of
    50  the  entities  described  in subparagraph (i) or (ii) of this paragraph,
    51  with control to be presumed by direct or  indirect  share  ownership  of
    52  fifty  percent  or greater, as well as the licensees, licensors, succes-
    53  sors, and assigns of each of those entities; or
    54    (b) A biological product license holder, which shall mean any  of  the
    55  following:

        A. 7465                             3
 
     1    (i)  The  holder of an approved biological product license application
     2  for a biological drug product under section 351(a) of the Public  Health
     3  Service Act, 42 U.S.C. 262(a);
     4    (ii)  A  person  owning or controlling enforcement of any patents that
     5  claim the biological product that is the subject of the approved biolog-
     6  ical patent license application; or
     7    (iii) The predecessors, subsidiaries, divisions,  groups,  and  affil-
     8  iates  controlled  by, controlling, or under common control with, any of
     9  the entities described in subparagraph (i) or (ii)  of  this  paragraph,
    10  with  control  to  be  presumed by direct or indirect share ownership of
    11  fifty percent or greater, as well as the licensees,  licensors,  succes-
    12  sors, and assigns of each of those entities.
    13    12. "Reference drug product" shall mean the product to be manufactured
    14  by  the reference drug holder and includes both branded drugs of the NDA
    15  holder and the biologic drug product of  the  biologic  product  license
    16  applicant.
    17    13.  "Statutory  exclusivity"  shall  mean  those  prohibitions on the
    18  approval of drug applications under clauses (ii) through (iv) of section
    19  505(c)(3)(E), section 527 or section 505A of the Federal Food, Drug, and
    20  Cosmetic Act, 21 U.S.C. 355(c)(3)(E), on  the  licensing  of  biological
    21  product  applications  under section 262(k)(7) of Title 42 of the United
    22  States Code or section 262(m)(2) or (3) of Title 42 of the United States
    23  Code.
    24    § 283. Preserving  access  to  affordable  drugs.  1.  (a)  Except  as
    25  provided in paragraph (c) of this subdivision, an agreement resolving or
    26  settling,  on  a final or interim basis, a patent infringement claim, in
    27  connection with the sale of a pharmaceutical product, shall be  presumed
    28  to have anticompetitive effects and shall be a violation of this section
    29  if both of the following apply:
    30    (i)  A nonreference drug filer receives anything of value from another
    31  company asserting patent infringement, including, but not limited to, an
    32  exclusive license or a promise that the brand company will not launch an
    33  authorized generic version of its brand drug; and
    34    (ii) The nonreference drug filer agrees to limit or  forego  research,
    35  development, manufacturing, marketing, or sales of the nonreference drug
    36  filer's product for any period of time.
    37    (b)  As used in subparagraph (i) of paragraph (a) of this subdivision,
    38  "anything of value" shall be interpreted broadly to include any type  of
    39  consideration,  value or benefit a reference drug holder or nonreference
    40  drug filer could possibly obtain from the agreement. "Anything of value"
    41  shall not include a settlement of patent infringement  claims  in  which
    42  the  consideration granted by the reference drug holder to the nonrefer-
    43  ence drug filer as part of the resolution or settlement consists of only
    44  one or more of the following:
    45    (i) The right to market the competing product  in  the  United  States
    46  before the expiration of either:
    47    (A) A patent that is the basis for the patent infringement claim; or
    48    (B)  A  patent right or other statutory exclusivity that would prevent
    49  the marketing of the drug;
    50    (ii) A covenant not to sue on a claim that the nonreference drug prod-
    51  uct infringes a United States patent;
    52    (iii) Compensation for saved reasonable future litigation expenses  of
    53  the reference drug holder but only if both of the following are true:
    54    (A)  The total compensation for saved litigation expenses is reflected
    55  in budgets that the reference drug  holder  documented  and  adopted  at
    56  least six months before the settlement; and

        A. 7465                             4
 
     1    (B) The compensation shall not exceed the lower of the following:
     2    (1) Seven million five hundred thousand dollars; or
     3    (2)  Five  percent  of  the  revenue  that the nonreference drug filer
     4  projected or forecasted it would receive in the  first  three  years  of
     5  sales  of  its  version of the reference drug documented at least twelve
     6  months before the settlement. If no projections or forecasts are  avail-
     7  able,  the  compensation  shall  not  exceed  two hundred fifty thousand
     8  dollars;
     9    (iv) An agreement by the reference drug holder not to  interfere  with
    10  the  nonreference drug filer's ability to secure and maintain regulatory
    11  approval to market the nonreference drug  product  or  an  agreement  to
    12  facilitate  the nonreference drug filer's ability to secure and maintain
    13  regulatory approval to market the nonreference drug product; or
    14    (v) An agreement resolving a patent infringement claim  in  which  the
    15  reference  drug  holder  forgives  the  potential  damages  accrued by a
    16  nonreference drug filer for an at-risk launch of the  nonreference  drug
    17  product that is the subject of that claim.
    18    (c)  Parties  to an agreement are not in violation of paragraph (a) of
    19  this subdivision  if  they  can  demonstrate  by  clear  and  convincing
    20  evidence that either of the following are met:
    21    (i)  The  value  received  by the nonreference drug filer described in
    22  subparagraph (i) of paragraph (a) of this  subdivision  is  a  fair  and
    23  reasonable  compensation  solely  for  other  goods or services that the
    24  nonreference drug filer has promised to provide; or
    25    (ii) The agreement has directly generated procompetitive benefits  and
    26  the  procompetitive  benefits  of the agreement outweigh the anticompet-
    27  itive effects of the agreement.
    28    2. In determining whether the parties to the agreement have met  their
    29  burden  under  paragraph (c) of subdivision one of this section, a court
    30  of competent jurisdiction shall not consider any of the following:
    31    (a) That entry into the marketplace could not have occurred until  the
    32  expiration  of  the  relevant patent exclusivity or that the agreement's
    33  provision for entry of the nonreference drug product before the  expira-
    34  tion  of  any  patent exclusivity means that the agreement is procompet-
    35  itive within the meaning of subparagraph (ii) of paragraph (c) of subdi-
    36  vision one of this section;
    37    (b) That any patent is enforceable and infringed by  the  nonreference
    38  drug  filer  in the absence of a final adjudication binding on the filer
    39  of those issues;
    40    (c) That the agreement caused no delay in entry  of  the  nonreference
    41  drug  filer's  drug product because of the lack of Federal Food and Drug
    42  Administration (FDA) approval of that or of  another  nonreference  drug
    43  product; or
    44    (d)  That the agreement caused no harm or delay due to the possibility
    45  that the nonreference drug filer's  drug  product  might  infringe  some
    46  patent that has not been asserted against the nonreference drug filer or
    47  that is not subject to a final and binding adjudication on that filer as
    48  to the patent's scope, enforceability, and infringement.
    49    3.  In determining whether the parties to the agreement have met their
    50  burden under paragraph (c) of subdivision one of this section,  a  court
    51  of competent jurisdiction shall presume that the relevant product market
    52  is  that market consisting of the reference drug of the company alleging
    53  patent infringement and the drug product of the nonreference drug  filer
    54  accused  of  infringement  and  any  other  biological  product  that is
    55  licensed as biosimilar or is an AB-rated generic to the reference  prod-
    56  uct.

        A. 7465                             5
 
     1    4.  (a) This section shall not modify, impair, limit, or supersede the
     2  applicability of the antitrust laws of the  state  pursuant  to  article
     3  twenty-two  of  the general business law, unfair competition laws of the
     4  state pursuant to article twenty-two-A of the general  business  law  or
     5  the  availability  of damages or remedies provided therein. This section
     6  shall not modify, impair, limit, or supersede  the  right  of  any  drug
     7  company  applicant to assert claims or counterclaims against any person,
     8  under the antitrust laws or other laws relating to unfair competition of
     9  the federal antitrust law or state law.
    10    (b) If any provision of this subdivision, an amendment  made  to  this
    11  subdivision,  or  the  application  of any provision or amendment to any
    12  person or circumstance is held to be unconstitutional, the remainder  of
    13  this  subdivision,  the  amendments  made  to  this subdivision, and the
    14  application of the provisions of this subdivision or amendments  to  any
    15  person or circumstance shall not be affected.
    16    5.  (a)(i)  Each  person  that violates or assists in the violation of
    17  this section shall forfeit and pay to the state a civil  penalty  suffi-
    18  cient to deter violations of this section, as follows:
    19    (A)  If the person who violated this section received any value due to
    20  that violation, an amount up to three times the value  received  by  the
    21  party  that is reasonably attributable to the violation of this section,
    22  or twenty million dollars, whichever is greater; or
    23    (B) If the violator has not received anything of value as described in
    24  this subparagraph, an amount up to three times the value given to  other
    25  parties  to  the  agreement  reasonably attributable to the violation of
    26  this section, or twenty million dollars.
    27    (C) For purposes of this subdivision, "reasonably attributable to  the
    28  violation"  shall  be  determined by the state's share of the market for
    29  the brand drug at issue in the agreement.
    30    (ii) Any penalty described in subparagraph (i) of this paragraph shall
    31  accrue only to the state and  shall  be  recovered  in  a  civil  action
    32  brought by the attorney general in its own name, or by any of its attor-
    33  neys  designated  by it for that purpose, against any party to an agree-
    34  ment that violates this section.
    35    (b) Each party that violates or  assists  in  the  violation  of  this
    36  section shall be liable for any damages, penalties, costs, fees, injunc-
    37  tions,  or other equitable or legal remedies, including, but not limited
    38  to, restitution and disgorgement, that may be just and reasonable.  Such
    39  remedies shall include, but not be  limited  to,  any  remedy  available
    40  under  articles  twenty-two  or twenty-two-A of the general business law
    41  and section sixty-three of the executive law.
    42    (c) If the state is awarded penalties under subparagraph (i) of  para-
    43  graph  (a)  of this subdivision, it shall not recover penalties pursuant
    44  to another law identified in paragraph (b)  of  this  subdivision.  This
    45  section shall not be construed to foreclose the state's ability to claim
    46  any  equitable or legal remedy available in paragraph (b) of this subdi-
    47  vision.
    48    (d) An action to enforce a cause of action for  a  violation  of  this
    49  section  shall  be  commenced within six years after the cause of action
    50  accrued.
    51    § 2. Severability clause. If any clause, sentence, paragraph, subdivi-
    52  sion, section or part of this act shall be  adjudged  by  any  court  of
    53  competent  jurisdiction  to  be  invalid or unenforceable, such judgment
    54  shall not affect, impair, or invalidate the remainder thereof, but shall
    55  be confined in its operation to the clause, sentence, paragraph,  subdi-
    56  vision,  section or part thereof directly involved in the controversy in

        A. 7465                             6
 
     1  which such judgment shall have been rendered. It is hereby  declared  to
     2  be  the  intent of the legislature that this act would have been enacted
     3  even if such invalid provisions had not been included herein.
     4    §  3.  This  act  shall take effect on the sixtieth day after it shall
     5  have become a law.
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