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Drug Competition Enhancement Act
4/15/2025, 4:23 AM
Summary of Bill S 1040
The bill seeks to prohibit this practice by requiring pharmaceutical companies to prove that any changes made to a drug are truly beneficial to patients and not just a way to stifle competition. This would help to ensure that consumers have access to more affordable generic versions of medications.
In addition to addressing product hopping, the bill also includes provisions for other purposes related to competition and consumer protection. These provisions are aimed at promoting fair competition in the pharmaceutical industry and protecting consumers from anti-competitive practices. Overall, Bill 119 s 1040 is designed to promote competition, lower drug prices, and protect consumers from unfair practices in the pharmaceutical industry. It is an important piece of legislation that aims to improve access to affordable medications for all Americans.
Congressional Summary of 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.
