Drug Competition Enhancement Act

The Drug Competition Enhancement Act (S.1040) prohibits drug manufacturers from engaging in "product hopping" - a practice where companies withdraw or disadvantage their original drug to push a newer "follow-on" version when generic or biosimilar competitors are about to enter the market. Specifically, it bans "hard switches" (officially withdrawing the original drug or destroying inventory to block generics) and "soft switches" (unfairly disadvantaging the original drug to favor the follow-on product) during a 3-year window before generic competition begins. The Federal Trade Commission (FTC) can enforce this by taking legal action against violators, seeking injunctions, or requiring disgorgement of profits gained from anti-competitive conduct. This law directly affects drug manufacturers holding approved "reference products" when generic or biosimilar applications are pending, aiming to prevent artificial barriers to lower-cost alternatives.