Drug Competition Enhancement Act

The "Drug Competition Enhancement Act" amends the Federal Trade Commission Act to prohibit product hopping , a practice by drug manufacturers designed to impede competition from generic drugs and biosimilar biological products. This legislation targets manufacturers who strategically switch patients to a new version of a drug to maintain market exclusivity. The prohibition applies during a critical period, beginning when a manufacturer receives notice of a generic or biosimilar application and extending up to three years after a follow-on product is marketed. The bill defines two primary types of prohibited conduct: hard switches and soft switches . A hard switch involves withdrawing, discontinuing, or destroying the inventory of a listed drug or reference product in a manner that impedes competition, while simultaneously marketing a follow-on product. A soft switch entails actions that unfairly disadvantage the original listed drug or reference product relative to a follow-on product, thereby hindering generic or biosimilar competition. Exclusions are made for truthful, non-misleading promotional marketing and ceasing promotional marketing. Manufacturers can offer justifications for their actions, such as safety risks, uncontrollable supply disruptions, or legitimate pro-competitive reasons, which the FTC can rebut. The FTC is empowered to enforce these prohibitions, enabling it to initiate proceedings, seek injunctions, and pursue equitable remedies including disgorgement of unjust enrichment and restitution for violations. This act applies to conduct and actions occurring on or after its enactment date.