S. 142 would create a framework through which the Federal Trade Commission (FTC) could initiate proceedings against the parties to agreements used to settle claims of patent infringement involving prescription drugs or biological products. Any such agreement would presumptively be considered illegal under antitrust law if a generic drug applicant or biosimilar biological product applicant that was party to the agreement received anything of value—excluding three permissible types of compensation specified in the bill—and if that applicant agreed to “limit or forgo research, development, manufacturing, marketing, or sales” of the drug or biological product. The parties to the agreement could override the presumption of illegality by demonstrating either that the “thing of value” was compensation for goods or services provided or that the pro‑competitive benefits of the agreement outweigh its anticompetitive effects. Under the bill, the FTC would be authorized to issue cease-and-desist orders and to seek civil penalties from each party to such an agreement.
