S. 1040

Drug Competition Enhancement Act This bill prohibits product hopping by drug manufacturers and authorizes the Federal Trade Commission (FTC) to enforce this prohibition. Generally, product hopping describes a situation where, when the patents on a reference drug (or biological product) expire, the manufacturer switches to a follow-on product that is covered by a later-expiring patent. Under this bill, a follow-on product is a modified version of the reference drug that has an indication (what the drug is used for) that is identical or substantively similar to an indication of the reference drug. The bill establishes a presumption that product hopping has occurred when a reference drug manufacturer, after receiving notice that the Food and Drug Administration has received an application to market a competing generic (or biosimilar) version, takes certain actions such as withdrawing the reference drug from the market and selling a follow-on product. A drug manufacturer may rebut these presumptions by demonstrating that its conduct was not intended to limit competition. The bill makes product hopping an unfair method of competition and provides for enforcement by the FTC. If the FTC has reason to believe a manufacturer has violated or is about to violate this prohibition on product hopping, the FTC may institute an administrative proceeding or bring suit in federal court to stop the manufacturer’s action and seek equitable remedies, including disgorgement of unjust profits or paying restitution to those harmed.