Provides that an agreement resolving a patent infringement claim, in connection with the sale of a pharmaceutical product, is to be presumed to have anticompetitive effects if a nonreference drug filer receives anything of value.
H5913 creates a new chapter in Rhode Island health and safety law aimed at preserving access to affordable drugs by regulating certain pharmaceutical patent settlements. The bill targets agreements that resolve patent infringement claims involving brand-name drugs, generic drugs, and biosimilars when the settlement gives the nonreference drug filer something of value and also delays or limits the entry, development, manufacturing, marketing, or sale of a competing product. In those circumstances, the agreement is presumed to have anticompetitive effects and is treated as a violation unless an exception applies.
The bill also requires drug manufacturers doing business in Rhode Island to notify the attorney general within 30 days when they enter arrangements that delay generic competition. The attorney general must then share that information with the state prescription drug program, Medicaid managed care plans, health carriers, and pharmacy benefit managers. The measure defines key terms broadly, including brand-name drug holders, generic applicants, biosimilar applicants, statutory exclusivity, and patent infringement claims, and it sets out specific exceptions for certain settlements, including those involving only early market entry rights, covenants not to sue, limited litigation-cost compensation, or agreements that can be shown to produce procompetitive benefits.
The bill would significantly affect pharmaceutical manufacturers, generic drug applicants, biosimilar applicants, insurers, pharmacy benefit managers, and the attorney general’s office. It would add a state enforcement mechanism on top of existing federal and state antitrust and unfair competition laws, and it authorizes civil penalties of up to three times the value involved or $20 million, whichever is greater, with enforcement brought by the attorney general. The bill also preserves other antitrust and consumer-protection remedies and includes a four-year statute of limitations and severability clause.
Overall, the bill’s apparent policy goal is to discourage so-called “pay-for-delay” or reverse-payment settlements that can postpone lower-cost drug competition and keep prices higher for consumers and public programs. Because no committee transcripts or votes were provided, there is no recorded legislative debate or voting history to gauge support or opposition. Based on the bill text alone, the measure appears designed to strengthen competition and transparency in prescription drug markets, while still allowing some patent settlements that can be justified as procompetitive or limited to legitimate litigation-related compensation.
The main point of contention likely centers on whether the bill goes too far in presuming anticompetitive harm from patent settlements and in exposing manufacturers to large penalties, versus whether those restrictions are necessary to prevent drug companies from using settlements to block generic and biosimilar entry. Another likely issue is how the exceptions will be applied in practice, especially the burden on parties to prove procompetitive benefits or that compensation reflects only reasonable litigation savings.
The bill would add a new chapter to Title 23 of the Rhode Island General Laws regulating pharmaceutical patent settlement agreements and generic-entry delays. It would create a state-level presumption of anticompetitive conduct for certain reverse-payment or delay agreements, authorize attorney general enforcement, require notice and information-sharing for delayed generic arrangements, and establish civil penalties and related remedies while preserving existing antitrust and unfair trade law claims.
No committee transcripts or vote history were provided, so there is no direct record of legislative sentiment. Based on the bill’s structure and stated purpose, the measure appears to be framed positively as a consumer- and competition-protection bill intended to lower drug costs and improve access to generics and biosimilars. The absence of recorded opposition or support in the provided materials means sentiment cannot be assessed beyond the bill’s pro-competition policy framing.
The likely controversy is between supporters who want to curb pay-for-delay settlements and opponents who may argue the bill interferes with legitimate patent litigation and settlement practices. The strongest points of tension are the presumption that certain settlements are anticompetitive, the broad definition of “anything of value,” the size of the civil penalties, and the burden placed on manufacturers to justify settlements as procompetitive. Another possible concern is whether the state standard could overlap with or complicate federal patent and antitrust enforcement.