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SF 3097

as introduced - 91st Legislature (2019 - 2020) Posted on 02/13/2020 03:40pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to health; preserving access to affordable drugs; proposing coding for new
law in Minnesota Statutes, chapter 151.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [151.80] PRESERVING ACCESS TO AFFORDABLE DRUGS ACT.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section the following terms have
the meanings given them.
new text end

new text begin (b) "ANDA" means Abbreviated New Drug Application.
new text end

new text begin (c) "ANDA filer" means a party that owns or controls an ANDA filed with the federal
Food and Drug Administration or has the exclusive rights under that ANDA to distribute
the ANDA product.
new text end

new text begin (d) "Agreement" means anything that would constitute an agreement under state law or
a trust under sections 325D.49 to 325D.66.
new text end

new text begin (e) "Agreement resolving or settling a patent infringement claim" includes any agreement
that is entered into within 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 includes but is not limited to the
following:
new text end

new text begin (1) 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;
new text end

new text begin (2) 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.
new text end

new text begin (f) "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, United States Code, title 42, section
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.
new text end

new text begin (g) "Commissioner" means the commissioner of health.
new text end

new text begin (h) "NDA" means new drug application.
new text end

new text begin (i) "Nonreference drug filer" means either:
new text end

new text begin (1) an ANDA filer; or
new text end

new text begin (2) a biosimilar biological product application filer.
new text end

new text begin (j) "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.
new text end

new text begin (k) "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.
new text end

new text begin (l) "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.
new text end

new text begin (m) "Reference drug holder" means either:
new text end

new text begin (1) a brand holder that is any of the following:
new text end

new text begin (i) the holder of an approved NDA for a drug product application filed under Section
505(b) of the Federal Food, Drug, and Cosmetic Act, United States Code, title 21, section
355(b);
new text end

new text begin (ii) 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; and
new text end

new text begin (iii) the predecessors, subsidiaries, divisions, groups, and affiliates controlled by,
controlling, or under common control with, any of the entities described in item (i) or (ii),
with control to be presumed by direct or indirect share ownership of 50 percent or greater,
as well as the licensees, licensors, successors, and assigns of each of those entities; or
new text end

new text begin (2) a biological product licenseholder, which means any of the following:
new text end

new text begin (i) the holder of an approved biological product license application for a biological drug
product under Section 351(a) of the Public Health Service Act, United States Code, title
42, section 262(a);
new text end

new text begin (ii) 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; and
new text end

new text begin (iii) the predecessors, subsidiaries, divisions, groups, and affiliates controlled by,
controlling, or under common control with, any of the entities described in item (i) or (ii),
with control to be presumed by direct or indirect share ownership of 50 percent or greater,
as well as the licensees, licensors, successors, and assigns of each of those entities.
new text end

new text begin (n) "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.
new text end

new text begin (o) "Statutory exclusivity" means those prohibitions on the approval of drug applications
under clauses (ii) through (iv), inclusive, of Section 505(c)(3)(E) (five-year and three-year
data exclusivity), Section 527 (orphan drug exclusivity), or Section 505A (pediatric
exclusivity), of the Federal Food, Drug, and Cosmetic Act, United States Code, title 21,
sections 355(c)(3)(E), 360cc, and 355a, respectively, or on the licensing of biological product
applications under United States Code, title 42, section 262(k)(7), or 262(m)(2) or (3).
new text end

new text begin Subd. 2. new text end

new text begin Requirements. new text end

new text begin (a)(1) Except as provided in clause (3), 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:
new text end

new text begin (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
new text end

new text begin (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.
new text end

new text begin (2) As used in paragraph (a), clause (1), item (i), "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 one or more of the following:
new text end

new text begin (i) the right to market the competing product in the United States before the expiration
of either:
new text end

new text begin (A) a patent that is the basis for the patent infringement claim; or
new text end

new text begin (B) a patent right or other statutory exclusivity that would prevent the marketing of the
drug;
new text end

new text begin (ii) a covenant not to sue on a claim that the nonreference drug product infringes a United
States patent;
new text end

new text begin (iii) compensation for saved reasonable future litigation expenses of the reference drug
holder but only if both of the following are true:
new text end

new text begin (A) the total compensation for saved litigation expenses is reflected in budgets that the
reference drug holder documented and adopted at least six months before the settlement;
and
new text end

new text begin (B) the compensation does not exceed the lower of $7,500,000 or five percent of the
revenue that the nonreference drug holder projected or forecasted it would receive in the
first three years of sales of its version of the reference drug documented at least 12 months
before the settlement. If no projections or forecasts are available, the compensation does
not exceed $250,000;
new text end

new text begin (iv) 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 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;
new text end

new text begin (v) 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; and
new text end

new text begin (vi) 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.
new text end

new text begin (3) Parties to an agreement are not in violation of clause (1) if they can demonstrate by
a preponderance of the evidence that either of the following are met:
new text end

new text begin (i) the value received by the nonreference drug filer described in clause (1) is a fair and
reasonable compensation solely for other goods or services that the nonreference drug filer
has promised to provide; or
new text end

new text begin (ii) the agreement has directly generated procompetitive benefits and the procompetitive
benefits of the agreement outweigh the anticompetitive effects of the agreement.
new text end

new text begin (b) In determining whether the parties to the agreement have met their burden under
paragraph (a), clause (3), the factfinder shall not presume any of the following:
new text end

new text begin (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 paragraph (a), clause (3), item (ii);
new text end

new text begin (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;
new text end

new text begin (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;
new text end

new text begin (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; and
new text end

new text begin (5) that this subdivision shall not be construed to preclude a party from introducing
evidence regarding clauses (1) to (4) and shall not be construed to preclude the factfinder
from making a determination regarding clauses (1) to (4) based on the full scope of the
evidence.
new text end

new text begin (c) In determining whether the parties to the agreement have met their burden under
paragraph (a), clause (3), 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.
new text end

new text begin (d)(1) This section does not modify, impair, limit, or supersede the applicability of the
antitrust laws of chapter 325D 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.
new text end

new text begin (2) If any provision of this section, or any amendment made to this section, or the
application of any provision or amendment to any person or circumstance is held to be
unconstitutional, the remainder of this section, the amendments made to this section, and
the application of the provisions of this section or amendments to any person or circumstance
shall not be affected.
new text end

new text begin (e) Any person who violates or assists in the violation of this section shall forfeit and
pay to the state a civil penalty sufficient to deter violations of this section, as follows:
new text end

new text begin (1) if the person who violated this section received any value due to that violation, an
amount up to three times the value received by the party that is reasonably attributable to
the violation of this section, or $20,000,000, whichever is greater; or
new text end

new text begin (2) if the violator has not received anything of value as described in clause (1), an amount
up to three times the value given to other parties to the agreement reasonably attributable
to the violation of this section, or $20,000,000, whichever is greater. "Reasonably attributable
to the violation" shall be determined by Minnesota's share of the market for the brand drug
at issue in the agreement.
new text end

new text begin (f) Any penalty described in paragraph (e) shall accrue only to the state treasury 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.
new text end

new text begin (g) 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 Minnesota law, including antitrust law in chapter 325D, as
applicable.
new text end

new text begin (h) If Minnesota is awarded penalties under this section, it may not recover penalties
pursuant to another law identified in paragraph (g). This section shall not be construed to
foreclose the state's ability to claim any relief or damages available under this section other
than those that are penalties.
new text end

new text begin (i) An action to enforce a cause of action for a violation of this section shall be
commenced within four years after the cause of action accrued.
new text end

new text begin Subd. 3. new text end

new text begin Severability. new text end

new text begin The provisions of this act are severable. If any provision of this
act 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.
new text end