Relates to preserving access to affordable drugs; provides 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, shall be presumed to have anticompetitive effects if a nonreference drug filer receives anything of value 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.
A08576 would add a new title to the Public Health Law aimed at preserving access to affordable drugs by targeting certain patent settlement agreements in the pharmaceutical industry. The bill defines a range of terms covering brand-name drug holders, generic drug applicants, biosimilar applicants, and patent infringement claims, and then sets out when a settlement or related agreement will be presumed anticompetitive.
Under the bill, an agreement resolving a patent dispute would violate state law if a generic, biosimilar, or other nonreference drug filer receives something of value from the brand company and, in return, agrees to delay or limit research, development, manufacturing, marketing, or sales of its product. The bill treats “anything of value” broadly, but carves out certain settlements, including early market entry, covenants not to sue, limited compensation for saved litigation costs within specified caps, regulatory assistance, and forgiveness of damages from an at-risk launch. A party can avoid liability by showing, with clear and convincing evidence, that the payment was fair compensation for other goods or services or that the deal produced procompetitive benefits that outweigh anticompetitive effects.
The bill would create a new state-level enforcement framework in the Public Health Law for pharmaceutical patent settlement agreements, supplementing existing antitrust and unfair competition laws without displacing them. It authorizes the Attorney General to bring civil actions and seek substantial penalties, including up to three times the value received or given, or $20 million, as well as other remedies such as restitution, disgorgement, injunctions, and fees. The bill also imposes a six-year statute of limitations and includes severability language, while expressly preserving other state and federal antitrust and unfair competition claims.
The bill’s stated purpose and structure suggest a strong pro-consumer, pro-competition orientation, with the goal of preventing pay-for-delay arrangements that can keep lower-cost generic and biosimilar drugs off the market. The available context does not include committee debate or recorded votes, so there is no direct evidence of opposition or support from hearings or floor action. Based on the text alone, the measure appears designed to appeal to lawmakers focused on lowering prescription drug costs and increasing market competition.
The main point of contention is likely to be whether the bill overreaches by presuming anticompetitive harm from patent settlements that may also reflect legitimate litigation compromise or business arrangements. Pharmaceutical brand manufacturers and possibly some generic or biosimilar firms may object to the broad definition of “anything of value,” the presumption of illegality, and the limits on what courts may consider when evaluating procompetitive justifications. Supporters, by contrast, would likely argue that the bill is narrowly aimed at pay-for-delay deals that postpone competition and keep drug prices high.