Proposed Bills Limit Pharmaceutical Patents: Panacea for Patients or Poison for Pharmaceutical Producers?

Senators John Cornyn(R-Texas), Chuck Grassley (R-Iowa), Richard Blumenthal (D-Conn.), and Dick Durbin (D.-Ill.) recently sponsored two bills, introduced on March 14th, that would affect patents in the pharmaceutical industry.

Drug Competition Enhancement Act of 2025 (assigned S. 1040 – 119^th Congress)

The first bill, entitled “Drug Competition Enhancement Act,” would make it an antitrust violation for a drug manufacturer to introduce in a way that impedes competition a follow-on product to a drug that has or will soon have a generic alternative.

As proposed, the Drug Competition Enhancement Act would give the Federal Trade Commission (FTC) enforcement power and make it a prima facie antitrust violation to engage in (1) a hard switch or (2) a soft switch. The Act does not require the FTC to act. It provides additional, permissive authority for the FTC to bring a proceeding before itself for an injunction. The FTC may alternatively bring a suit before a district court for disgorgement, restitution, or an injunction.

A hard switch refers to three scenarios:

1. 1. at the request of a manufacturer, the Commissioner of Food and Drugs withdrew the approval of an application of a listed drug or reference product or placed the listed drug or reference product on the discontinued list, and the manufacturer marketed or sold a follow-on product;
   2. a manufacturer withdrew, discontinued the manufacture of, or announced withdrawal of, discontinuance of the manufacture of, or intent to withdraw the application with respect to the listed drug or reference product in a manner that impedes competition from a generic drug or a biosimilar biological product, unless such actions were taken by the manufacturer pursuant to a request of the Commissioner of Food and Drugs, and the manufacturer marketed or sold a follow-on product; or
   3. a manufacturer destroyed the inventory of the listed drug or reference product in a manner that impedes competition from a generic drug or a biosimilar biological product, and the manufacturer marketed or sold a follow-on product.

A soft switch requires proof of two elements:

1. 1. The manufacturer took actions, other than those described as a hard switch that unfairly disadvantaged a listed drug or reference product relative to a follow-on product, impeding competition from a generic drug or a biosimilar biological product, and
   2. the manufacturer marketed or sold a follow-on product.

The Act excludes truthful, non-misleading promotional marketing and the cessation of promotional marketing for the listed drug or reference product from the antitrust violations it prohibits. And the Act sets a 180-day or 3-year time limit, whichever is earlier, for the FTC to bring a case. The shorter time limit begins running when the manufacturer receives notice of a follow-on application. And the longer time limit begins running when the manufacturer first markets a follow-on product.

A manufacturer can rebut the prima facie case by providing an acceptable justification for the changes. One prescribed justification for a hard switch by a manufacturer is a showing that the manufacturer would have taken the action regardless of whether the generic drug or biosimilar product had already entered the market, and the manufacturer took the action for the safety of patients.

Affordable Prescriptions for Patients Act of 2025 (assigned S. 1041 – 119^th Congress)

The second bill, entitled “Affordable Prescriptions for Patients Act” would limit the number of patents that can be asserted in infringement suits over biosimilar drugs under the Biologics Price Competition and Innovation Act (“BPCIA”). The bill would restrict the number of patents to 20. Additionally, the asserted patents under the Affordable Prescriptions for Patents Act must satisfy each of three requirements:

1. 1. The patents claim the biological product or method of manufacturing it that is the subject of the application;
   2. The patents are in the initial list of patents the reference product sponsor believes a claim of infringement could reasonably be asserted for; and
   3. The patents:
      1. have an actual filing date of more than 4 years after the approval of the reference product; or
      2. include a claim to a manufacturing method not used by the reference product sponsor.

With respect to requirement 2, the Act and BPCIA provide an exception for patents issued after the initial list, allowing assertion but capping them at 10 of the 20 allowed to be asserted. Additionally, a court may increase the number of patents asserted if justice requires or for good cause.

This is not the first time the Affordable Prescriptions for Patients Act was put forward. In the previous Congress’s Senate, a similar bill passed unanimously but never received a vote in the House.

Looking Forward

If passed, these bills may have significant impacts on strategies for the protection of drug and biologics by pharmaceutical companies. In anticipation of the changes proposed by the Drug Competition Enhancement Act, pharmaceutical manufacturers of drugs and/or biologics may need to take proactive steps to protect their products and minimize risks of antitrust issues. In addition, the Affordable Prescriptions for Patents Act may reduce litigation barriers for biosimilar manufacturers, potentially increasing competition on the market.