21 U.S.C. § 355–2 — Actions for delays of generic drugs and biosimilar biological products

(a) Definitions This subsection defines terms used in the section: (1) "Commercially reasonable, market-based terms" means (A) a non-discriminatory price for the covered product at or below its most recent wholesale acquisition cost (as defined in 42 U.S.C. § 1395w–3a(c)(6)(B)); (B) a delivery schedule that gets the product to the eligible product developer on the timing required by subsection (b)(2)(A)(iv); and (C) no additional conditions placed on the sale. (2) "Covered product": (A) means any drug approved under section 355(c) or (j), or biological product licensed under 42 U.S.C. § 262(a) or (k); any combination of such products; or, when reasonably necessary to support or meet the approval requirements for such a drug or biological product, any product (including a device) marketed or intended for use with it; but (B) does not include a drug or biological product on the drug shortage list under section 356e — unless it has been on that list continuously for more than 6 months, or the Secretary decides that including it as a covered product would likely help fix or prevent a shortage. (3) "Device" has the meaning given in section 321. (4) "Eligible product developer" means a person seeking approval under section 355(b)(2) or (j), or licensing under 42 U.S.C. § 262(k), for a product. (5) "License holder" means the holder of an application approved under section 355(c) or (j), or of a license under 42 U.S.C. § 262(a) or (k), for a covered product. (6) "REMS" means a risk evaluation and mitigation strategy under section 355–1. (7) "REMS with ETASU" means a REMS that includes elements to assure safe use under section 355–1(f). (8) "Secretary" means the Secretary of Health and Human Services. (9) "Single, shared system of elements to assure safe use" means that system as defined under section 355–1(f). (10) "Sufficient quantities" means the amount of a covered product that the eligible product developer decides it needs to (A) run testing supporting an application under section 355(b)(2) or (j), or under 42 U.S.C. § 262(k); and (B) meet any regulatory requirements for approving that application. (b) Civil action for failure to provide sufficient quantities of a covered product (1) In general: An eligible product developer may sue the license holder for a covered product in an appropriate federal district court, alleging the license holder refused to provide sufficient quantities of the product on commercially reasonable, market-based terms. (2) Elements: (A) In general: To win, the developer must prove, by a preponderance of the evidence: (i) that either the product is not subject to a REMS with ETASU, or — if it is — the developer has obtained a covered product authorization from the Secretary and given a copy to the license holder; (ii) that as of the date the suit is filed, the developer still has not gotten sufficient quantities on fair terms; (iii) that the developer sent a written purchase request to a named corporate officer of the license holder by certified or registered mail with return receipt requested, specifying a point-of-contact person and communication method, and an address for shipment once terms are agreed; and (iv) that the license holder has not delivered sufficient quantities on fair terms by 31 days after receiving the request (for a product not subject to a REMS with ETASU), or by 31 days after the later of receiving the request or receiving a copy of the covered product authorization (for a product subject to a REMS with ETASU). (B) Authorization for covered product subject to a REMS with ETASU: (i) Request: A developer may submit a written request to the Secretary asking to be authorized to obtain sufficient quantities of a product subject to a REMS with ETASU. (ii) Authorization: Within 120 days of receiving the request, the Secretary must, by written notice, authorize the developer to obtain sufficient quantities — for development and testing that does not involve human clinical trials, if the developer agrees to any conditions the Secretary sets; or for testing that does involve human clinical trials, if the developer has submitted protocols, informed consent documents, and materials providing safety protections comparable to the REMS (or otherwise satisfied the Secretary that such protections will be provided), and has met any other requirements the Secretary sets. (iii) Notice: The authorization must state that the license holder's providing the product under its terms will not violate the REMS. (3) Affirmative defense: In the lawsuit, the license holder bears the burden of proving, by a preponderance of the evidence, one of three defenses: (A) that on the date of the developer's request, neither the license holder nor its agents, wholesalers, or distributors were making or marketing the product, and none of them otherwise had access to inventory to supply the developer on fair terms; (B) that the license holder sells the product through agents, distributors, or wholesalers; has placed no restrictions on them selling to eligible product developers; and the developer could have bought sufficient quantities on fair terms from them; or (C) that the license holder made a timely offer, through the specified contact and communication method, to sell sufficient quantities on fair terms — within 14 days of the request for a product not subject to a REMS with ETASU (or 20 days for one that is) — and the developer failed to accept that offer within 7 days of receiving it (or 10 days, for a REMS-with-ETASU product). (4) Remedies: (A) In general: If the developer prevails, the court must (i) order the license holder to provide sufficient quantities of the product without delay on fair terms; (ii) award the developer reasonable attorney's fees and costs; and (iii) award a monetary amount sufficient to deter the license holder from future refusals, if the court finds, by a preponderance of the evidence, that the license holder delayed without a legitimate business justification, or failed to comply with the court's supply order. (B) Maximum monetary amount: That deterrence award cannot exceed the revenue the license holder earned on the product during the period beginning 31 days after receiving the request (or, for a REMS-with-ETASU product, 31 days after the later of receiving the request or the covered product authorization) and ending when the developer actually received sufficient quantities. (C) Avoidance of delay: The court may issue the supply order before deciding whether, or how much, the developer is entitled to under the fee or deterrence-award provisions. (c) Limitation of liability A license holder for a covered product is not liable under any federal, state, or local law for a claim arising from an eligible product developer's failure to follow adequate safeguards to ensure the product is used safely during development or testing — including in transporting, handling, using, or disposing of it. (d) Omitted This subsection is marked "Omitted" in the statute; it has no current text. (e) Rule of construction (1) Definition: In this subsection, "antitrust laws" has the meaning given in section 12(a) of title 15, and also includes section 45 of title 15 to the extent it applies to unfair methods of competition. (2) Antitrust laws: Nothing in this section limits how the antitrust laws operate. (f) Omitted This subsection is marked "Omitted" in the statute; it has no current text. (g) Rule of construction Nothing in this section, in the amendments made by this section, or in section 355–1 should be read as (1) stopping a license holder from giving an eligible product developer access to a covered product without an authorization under this section; or (2) in any way removing the requirement for a REMS with ETASU under section 355–1, as it otherwise applies to that covered product.