HB4470 104TH GENERAL ASSEMBLY

LRB104 13667 BAB 26326 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB4470

Introduced 1/20/2026, by Rep. Hoan Huynh

SYNOPSIS AS INTRODUCED:

New Act

Creates the Prohibition on Anticompetitive Pharmaceutical Practices Act. Provides that, except as specified, a court before which the Attorney General brings an action under the Act shall presume that a resolution agreement that ends a dispute over an alleged infringement of a patent, or a violation of other protection for a protected drug, has anticompetitive effects and is a violation of the Act if, as part of or in connection with the resolution agreement, an alleged infringer: (1) receives an item of value; or (2) agrees to limit or stop researching, developing, manufacturing, marketing, or selling a competing drug. Provides that a resolution agreement does not violate the Act and a party to the resolution agreement may overcome the presumption of anticompetition if the party, by a preponderance of evidence, can demonstrate that: (1) the item of value that the alleged infringer received is fair and reasonable compensation solely for other goods or services that the claimant promised to provide to the alleged infringer; or (2) the agreement has directly generated procompetitive benefits within the relevant market and the procompetitive benefits of the resolution agreement favor competition to the extent that the procompetitive benefits materially outweigh the anticompetitive effects of the resolution agreement. Sets forth provisions concerning penalties and enforcement of the Act by the Attorney General. Provides that the Act applies to resolution agreements: (1) that are negotiated, completed, or entered into within the State on or after the effective date of this Act; (2) where the dispute arose out of or was substantially related to pharmaceutical sales that were made within the State; or (3) where a party to the resolution agreement is an entity registered to conduct business within the State.

A BILL FOR

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Prohibition on Anticompetitive Pharmaceutical Practices Act.

Section 5. Definitions. As used in this Act:

"Alleged infringer" means a person who receives or is subject to an allegation, complaint, demand, service of process, or other communication in connection with a claim that the person's research, development, manufacture, marketing, distribution, or sale of a competing drug infringes a patent or other protection for a protected drug.

"Claimant" means a person who holds a patent for a protected drug or is the beneficiary of other protection for a protected drug.

"Competing drug" means a drug that has properties that are similar enough to the properties of a protected drug to offer market competition to the protected drug or that serve as a basis for a claimant's claim that an alleged infringer that manufactures, markets, distributes, or sells the drug has infringed the patent or other protection for the protected drug.

"Item of value" means any tangible or intangible item, including:

(1) an exclusive license to manufacture, market, distribute, or sell a protected drug; or

(2) an agreement that a claimant will not manufacture, market, distribute, or sell a generic version of a protected drug in competition with the other party to the agreement.

"Item of value" does not include an agreement for which there is no consideration in the form of:

(1) a right or license to manufacture, market, distribute, or sell in the United States a competing drug before the expiration of:

(A) the patent for or a right related to the patent for the protected drug; or

(B) the period during which federal law prevents approval of an application to manufacture, market, distribute, or sell a competing drug;

(2) a covenant not to sue on a claim that an alleged infringer's competing drug infringes a patent;

(3) a payment to the alleged infringer of a portion of the litigation and other legal expenses a claimant avoided as a result of the agreement, if the claimant identified and documented the expenses at least 6 months before executing the agreement and the payment does not exceed the lesser of:

(A) $7,500,000;

(B) 5% of the revenue that the alleged infringer projected receiving in the first 3 years of sales of the alleged infringer's competing drug, if the alleged infringer made and documented the projected revenue at least one year before executing the agreement; or

(C) $250,000 if the alleged infringer did not make and document the projected revenue as described in subparagraph (B);

(4) permission for the alleged infringer to begin manufacturing, marketing, distributing, offering for sale, or selling a competing drug if, before the expiration of the patent or other protection for the protected drug, the claimant seeks or obtains approval to, or actually does, manufacture, market, distribute, or sell a version other than a licensed generic version of the protected drug that has the same active ingredient but a different dosage, strength, or physical form;

(5) a promise from the claimant to facilitate or not to interfere with the alleged infringer's ability to obtain regulatory approval to manufacture, market, distribute, and sell a competing drug; or

(6) a renunciation or disclaimer of damages for an alleged infringer's infringement of the patent or other protection for the protected drug.

"Patent" means:

(1) a patent that has been issued;

(2) an extension, reissue, renewal, division, continuation, continuation in part, reexamination, or term restoration for a patent;

(3) an application for a patent that has been filed; or

(4) a patent of addition or an extension to a patent of addition.

"Protected drug" means a pharmaceutical drug that is subject to and protected by:

(1) a patent; or

(2) a federal law under which approval of an application to manufacture, market, distribute, or sell a competing drug may not occur for a specified length of time.

"Resolution agreement" means an agreement in any form that accompanies, is part of, is consideration for, is contingent upon, is substituted for, or is otherwise directly related to and is entered into within 30 days before or after:

(1) a settlement in lieu of a trial or a dismissal following the commencement of an action;

(2) a mediated compromise or other compromise;

(3) a decision in an arbitration proceeding;

(4) a judgment entered by a court;

(5) a withdrawal, retraction, or suspension of a claim or a failure to prosecute a claim that leads to a dismissal; or

(6) any other formal or informal resolution that ends a dispute.

Section 10. Presumption of anticompetitive effects. Except as provided in Section 15, a court before which the Attorney General brings an action under this Act shall presume that a resolution agreement that ends a dispute over an alleged infringement of a patent, or a violation of other protection for a protected drug, has anticompetitive effects and is a violation of this Act if, as part of or in connection with the resolution agreement, an alleged infringer:

(1) receives an item of value; or

(2) agrees to limit or stop researching, developing, manufacturing, marketing, or selling a competing drug.

Section 15. Exemptions.

(a) A resolution agreement does not violate this Act and a party to the resolution agreement may overcome the presumption set forth in Section 10 if the party, by a preponderance of evidence, can demonstrate that:

(1) the item of value that the alleged infringer received is fair and reasonable compensation solely for other goods or services that the claimant promised to provide to the alleged infringer; or

(2) the agreement has directly generated procompetitive benefits within the relevant market and the procompetitive benefits of the resolution agreement favor competition to the extent that the procompetitive benefits materially outweigh the anticompetitive effects of the resolution agreement.

(b) In determining whether a party has met the party's burden under this Section, the court:

(1) shall presume that the relevant market for the purposes of determining the effects of the resolution agreement consists of the market within this State for the protected drug, the competing drug, and any other biological product that, as described in 42 U.S.C. 262(i)(2), as in effect on the effective date of this Act, is interchangeable with or biosimilar to the protected drug; and

(2) may not presume that:

(A) because the alleged infringer could not have manufactured, marketed, distributed, or sold a competing drug before the patent or other protection for a protected drug had expired, or because the resolution agreement gives permission or a license to the alleged infringer to manufacture, market, distribute, or sell a competing drug, the benefits of the resolution agreement outweigh the anticompetitive effects of the resolution agreement;

(B) the patent or other protection for the protected drug was enforceable and the alleged infringer did infringe the patent or violate another available protection for the protected drug, unless a final adjudication on the merits of the claimant's claim or action determines that the patent or other protection was enforceable and the infringement did occur;

(C) the agreement did not delay the manufacturing, marketing, distribution, or sale of a competing drug because the alleged infringer lacked approval from the federal Food and Drug Administration and the lack of approval meant that the alleged infringer could not have manufactured, marketed, distributed, or sold the competing drug; or

(D) the agreement did not delay or cause harm because the competing drug might have infringed a patent or violated a protection for a protected drug for which a claimant has not made a claim or for which a final adjudication on the merits has not occurred with respect to the scope, enforceability, or infringement of the patent or other protection.

Section 20. Penalties and enforcement.

(a) A person who violates or assists in violating this Act, in addition to and not in lieu of other remedies available under other applicable laws, is liable for a civil penalty in an amount that is equivalent to the greater of:

(1) 3 times the value of the item of value that the alleged infringer received; or

(2) $10,000,000 for each violation.

(b) The Attorney General, within 4 years after a violation of this Act occurs or within 4 years after the Attorney General discovers that a violation has occurred, whichever is later, may bring an action in a circuit court of this State to punish violations of this Act. The Attorney General shall deposit the proceeds of any civil penalty the Attorney General recovers from a violator into the General Revenue Fund.

Section 25. Applicability. This Act applies to resolution agreements:

(1) that are negotiated, completed, or entered into within this State on or after the effective date of this Act;

(2) under which the dispute arose out of or was substantially related to pharmaceutical sales that were made within this State; or

(3) under which a party to the resolution agreement is an entity registered to conduct business within this State.