# Plain Language Summary: Preserve Access to Affordable Generics and Biosimilars Act

## What This Bill Does

This bill aims to stop pharmaceutical companies from making secret deals to keep cheaper drugs off the market. Specifically, it prohibits brand-name drug manufacturers from paying generic drug companies or biosimilar manufacturers (companies making cheaper versions of biological drugs) to delay releasing their lower-cost alternatives. These types of agreements—called "reverse payment" settlements—currently allow brand-name companies to share their profits with potential competitors in exchange for staying out of the market longer, which keeps drug prices artificially high.

## Who Is Affected

**Consumers and patients** would be the primary beneficiaries, as the bill aims to lower prescription drug costs by allowing cheaper generic and biosimilar drugs to reach the market faster. **Insurance companies and government programs** (like Medicare and Medicaid, which pay for over 40% of prescription drugs) would also save money. On the other side, **brand-name pharmaceutical companies** would lose the ability to use these delay tactics to protect their profits, and **generic/biosimilar manufacturers** would lose potential payments to stay out of the market—though they could gain market share through legitimate competition.

## Key Provisions

The bill makes it illegal for drug companies to enter into settlement agreements that have "anticompetitive effects"—meaning deals designed to reduce competition and delay cheaper alternatives. The legislation treats violations as unfair business practices under the Federal Trade Commission Act, giving regulators authority to enforce the rules. The bill applies to both traditional generic drugs (covered under 1984 law) and newer biosimilar biological products (covered under 2010 law), closing loopholes in both areas.

Preserve Access to Affordable Generics and Biosimilars Act

Klobuchar, Amy

Preserve Access to Affordable Generics and Biosimilars ActThis 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&nbsp;the forfeiture of the 180-day marketing exclusivity period for a generic drug.Additionally, when a generic or biosimilar drug manufacturer enters into an agreement with another drug manufacturer related to the manufacturing, marketing, or sale of a drug, the manufacturers must certify that the material they have given the FTC and the Department of Justice concerning the agreement contains the complete agreement and any related agreements, including descriptions of any oral agreements or representations.