2025 -- H 5913

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LC001823

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2025

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A N   A C T

RELATING TO HEALTH AND SAFETY -- PRESERVING ACCESS TO AFFORDABLE

DRUGS

     Introduced By: Representatives Furtado, Solomon, McGaw, Dawson, Read, Boylan,
Kislak, Alzate, Stewart, and Kazarian

     Date Introduced: February 28, 2025

     Referred To: House Judiciary

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 23 of the General Laws entitled "HEALTH AND SAFETY" is hereby

amended by adding thereto the following chapter:

CHAPTER 25.7

PRESERVING ACCESS TO AFFORDABLE DRUGS

     23-25.7-1. Definitions.

     As used in this chapter:

     (1) “ANDA” means abbreviated new drug application.

     (2) “ANDA filer” means a party that owns or controls an ANDA filed with the Food and

Drug Administration or has the exclusive rights under that ANDA to distribute the ANDA product.

     (3) “Agreement” means anything that would constitute an agreement under state law or a

“trust” under title 18.

     (4) “Agreement resolving or settling a patent infringement claim” includes any agreement

that is entered into within thirty (30) 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 agreement shall include, but is not limited to, the

following:

     (i) Any agreement required to be provided to the Federal Trade Commission or the

Antitrust Division of the United States Department of Justice under the Medicare Prescription

Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173).

     (ii) Any agreement between a biosimilar or interchangeable product applicant and a

reference product sponsor under the Biologics Price Competition and Innovation Act of 2009

(BPCIA) (Public Law 111-148) that resolves patent claims between the applicant and sponsor.

     (5) “Biosimilar biological product application filer” means a party that owns or controls a

biosimilar biological product application filed with the Food and Drug Administration under

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 application to distribute the biosimilar biological product.

     (6) “NDA” means new drug application.

     (7) “Nonreference drug filer” means either:

     (i) An ANDA filer; or

     (ii) A biosimilar biological product application filer.

     (8) “Nonreference drug product” means the product to be manufactured under an ANDA

that is the subject of the patent infringement claim, a biosimilar biological product that is the

product to be manufactured under the biosimilar biological product application that is the subject

of the patent infringement claim, or both.

     (9) “Patent infringement” means infringement of any patent or of any filed patent

application, extension, reissue, renewal, division, continuation, continuation in part, reexamination,

patent term restoration, patents of addition, and extensions thereof.

     (10) “Patent infringement claim” means 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” means either:

     (i) A brand holder that is any of the following:

     (A) 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));

     (B) A person owning or controlling enforcement of the patent listed in the Approved Drug

Products with Therapeutic Equivalence Evaluations (commonly known as the “FDA Orange

Book”) in connection with the NDA;

     (C) The predecessors, subsidiaries, divisions, groups, and affiliates controlled by,

controlling, or under common control with, any of the entities described in subsection (11)(ii)(A)

or (11)(ii)(B) of this section, with control to be presumed by direct or indirect share ownership of

fifty percent (50%) or greater, as well as the licensees, licensors, successors, and assigns of each of

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those entities;

     (ii) A biological product license holder, which means any of the following:

     (A) 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));

     (B) A person owning or controlling enforcement of any patents that claim the biological

product that is the subject of the approved biological patent license application.

     (C) The predecessors, subsidiaries, divisions, groups, and affiliates controlled by,

controlling, or under common control with, any of the entities described in subsection (11)(ii)(A)

or (11)(ii)(B) of this section, with control to be presumed by direct or indirect share ownership of

fifty percent (50%) or greater, as well as the licensees, licensors, successors, and assigns of each of

those entities.

     (12) “Reference drug product” means 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” means those prohibitions on the approval of drug applications

under clauses (ii) through (iv), inclusive, of Section 505(c)(3)(E) (five (5) year and three (3) year

data exclusivity), Section 527 (orphan drug exclusivity), or Section 505A (pediatric exclusivity),

of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(c)(3)(E), 360cc, and 355a,

respectively) or on the licensing of biological product applications under Section 262(k)(7) of Title

42 of the United States Code (twelve (12) year exclusivity) or Section 262(m)(2) or (3) of Title 42

of the United States Code (pediatric exclusivity).

     23-25.7-2. Delay of introduction of generic medications.

     (a) Each pharmaceutical manufacturer doing business in this state that manufactures a

brand name prescription drug and enters into an arrangement, through agreement or otherwise, with

another pharmaceutical manufacturer that has the purpose or effect of delaying or preventing such

other manufacturer from introducing a generic substitute for such drug into the marketplace shall,

not later than thirty (30) days after entering into such arrangement, send notice to the attorney

general, in a form and manner prescribed by the attorney general, disclosing the name of such drug,

the wholesale price, the disease such drug is commonly prescribed to treat, the manufacturer of

such drug, the name of the generic manufacturer, and the length of the delay.

     (b) The attorney general shall, no later than thirty (30) days after receiving a notice pursuant

to subsection (a) of this section, share the information with the prescription drug program

established in chapter 21 of title 40, all Medicaid managed care plans, health carriers and pharmacy

benefit managers doing business in the state in a format and manner prescribed by the attorney

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general.

     23-25.7-3. Unlawful agreements.

     (a)(1) Except as provided in subsection (e) of this section, 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.

     (2) As used in this section, “anything of value” does not include a settlement of a patent

infringement 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;

     (B) A patent right or other statutory exclusivity that would prevent the marketing of the

drug; or

     (ii) A covenant not to sue on a claim that the nonreference drug product 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 (6) months before the settlement; and

     (B) The compensation does not exceed the lower of the following:

     (I) Seven million five hundred thousand dollars ($7,500,000);

     (II) Five percent of the revenue that the nonreference drug holder projected or forecasted

it would receive in the first three (3) years of sales of its version of the reference drug documented

at least twelve (12) months before the settlement. If no projections or forecasts are available, the

compensation does not exceed two hundred fifty thousand dollars ($250,000).

     (b) 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

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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 reference drug does not include an authorized generic version of the reference drug.

     (c) 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.

     (d) 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.

     (e) Parties to an agreement are not in violation of subsection (a)(1)(i) of this section if they

can demonstrate by a preponderance of the evidence that either of the following are met:

     (1) The value received by the nonreference drug filer is a fair and reasonable compensation

solely for other goods or services that the nonreference drug filer has promised to provide; or

     (2) The agreement has directly generated procompetitive benefits and the procompetitive

benefits of the agreement outweigh the anticompetitive effects of the agreement.

     (f) In determining whether the parties to the agreement have met their burden under

subsection (e) of this section, the factfinder shall not presume any of the following:

     (1) 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 expiration of any patent exclusivity means that the agreement is procompetitive

within the meaning of subsection (e) of this section;

     (2) 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;

     (3) 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;

     (4) 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.

     (5) This subsection shall not be construed to preclude a party from introducing evidence

regarding subsections (f)(1) through (f)(4) of this section, inclusive, and shall not be construed to

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preclude the factfinder from making a determination regarding subsections (f)(1) to (f)(4) of this

section, inclusive, based on the full scope of the evidence.

     (g) In determining whether the parties to the agreement have met their burden under

subsection (e)(2) of this section, the factfinder 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 licensed as biosimilar or is an AB-rated generic to the reference product.

     (h) This section does not modify, impair, limit, or supersede the applicability of chapter 36

of title 6 ("antitrust law"), chapter 13 of title 6 ("unfair sales practices"), chapter 13.1 of title 6

("deceptive trade practices"), or the availability of damages or remedies provided therein. This

section does 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.

     (i)(1) Each person that violates or assists in the violation of this section shall forfeit and

pay a civil penalty sufficient to deter violations of this section, as follows:

     (i) If the person who violated this section received any value due to that violation, an

amount up to three (3) times the value received by the party that is reasonably attributable to the

violation of this section, or twenty million dollars ($20,000,000), whichever is greater;

     (ii) If the violator has not received anything of value as described in subsection (f)(1)(i) of

this section, an amount up to three (3) times the value given to other parties to the agreement

reasonably attributable to the violation of this section, or twenty million dollars ($20,000,000),

whichever is greater;

     (iii) For purposes of this section, “reasonably attributable to the violation” shall be

determined by Rhode Island’s share of the market for the brand drug at issue in the agreement.

     (2) Any penalty described herein shall accrue only to the State of Rhode Island and shall

be recovered in a civil action brought by the attorney general in its own name, or by any of its

attorneys designated by it for that purpose, against any party to an agreement that violates this

section.

     (3) Each party that violates or assists in the violation of this section shall be liable for any

damages, penalties, costs, fees, injunctions, or other remedies that may be just and reasonable and

available under chapter 36 of title 6 ("antitrust law"), chapter 13 of title 6 ("unfair sales practices"),

chapter 13.1 of title 6 ("deceptive trade practices"), as applicable.

     (4) If the State of Rhode Island is awarded penalties herein, it may not recover penalties

pursuant to another law identified in subsection (e)(1) of this section. This section shall not be

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construed to foreclose the State of Rhode Island’s ability to claim any relief or damages available,

other than those that are penalties.

     (5) An action to enforce a cause of action for a violation of this section shall be commenced

within four (4) years after the cause of action accrued.

     23-25.7-4. Severability.

     The provisions of this chapter are severable. If any provision of this chapter or its

application is held invalid, that invalidity shall not affect other provisions or applications that can

be given effect without the invalid provision or application.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO HEALTH AND SAFETY -- PRESERVING ACCESS TO AFFORDABLE

DRUGS

***

     This act would provide 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, is to be

presumed to have anticompetitive effects if a nonreference drug filer receives anything of value, as

defined, 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, as specified. The act would provide various

exceptions to this prohibition, including, among others, if the agreement has directly generated

procompetitive benefits and the procompetitive benefits of the agreement outweigh the

anticompetitive effects of the agreement. The act would make a violation of these provisions

punishable by a civil penalty that is recoverable only in a civil action brought by the attorney

general, as specified.

     This act would take effect upon passage.

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