House Energy & Commerce Committee Issues Report on CREATES Act
Excerpts of the report follow:
Purpose and Summary
H.R. 965, the "Creating and Restoring Equal Access to Equivalent Samples Act of 2019", was introduced on
Background and Need for Legislation
Drug prices in
1AS Kesselheim, J Avorn, & A Sarpatwari, The High Cost of Prescription Drugs in
2Food and
Access to brand drug samples is integral to the competition contemplated by the Hatch-Waxman Act.3 Some branded drug manufacturers use restricted distribution systems--including safety protocols called Risk Evaluation and Mitigation Strategies or REMS--to delay or impede generic competition through the delay or denial of the sale of samples needed to conduct testing necessary for purposes of FDA approval, or through the delay of negotiations on single, shared protocols.4}5
3Michael Carrier, Sharing, Samples, and Generics: An Antitrust Framework (2017) (http://cornelllawreview.org/files/2017/11/ 1.Carrierfinal.pdf).
4Alex Brill, Unrealized Savings from the Misuse of REMS and Non- REMS Barriers (2018) (https://accessiblemeds.org/sites/default/files/ 201809/REMS_WhitePaper_September2018 %5B2%5D.pdf).
5Id. 3
The CREATES Act seeks to discourage the delay or denial of the sale of samples needed for purposes of submitting an application to the FDA by allowing a manufacturer facing delay tactics to bring an action in federal court for injunctive relief. Courts would be authorized to award monetary damages in an amount sufficient to deter gaming by brand manufacturers. FDA would also be given clarified discretion to allow generic manufacturers to operationalize equivalent safety protocols in a different separate system rather than enter a shared safety protocol with brand manufacturers.
Committee Hearings
For the purposes of section 103(i) of
The Subcommittee on Health held a legislative hearing entitled, "Lowing the Cost of Prescription Drugs: Reducing Barriers to
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Committee Consideration
H.R. 965, the "Creating and Restoring Equal Access to Equivalent Samples Act of 2019" or the "CREATES Act of 2019", was introduced on
On
Committee Votes
Clause 3(b) of rule XIII of the Rules of the
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Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII and clause 2(b)(1) of rule X of the Rules of the
Pursuant to 3(c)(2) of rule XIII of the Rules of the
Congressional Budget Office Estimate
With respect to the requirements of clause (3)(c)(3) of rule XIII of the Rules of the
U.S.
Hon.
Dear Mr. Chairman: The
If you wish further details on this estimate, we will be pleased to provide them. The CBO staff contact is
Sincerely,
Enclosure.
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H.R. 965 would create a private right of action that would allow developers of generic drugs or biosimilar products to bring civil lawsuits against manufacturers of brand-name drugs if sufficient quantities of reference samples of a branded product are not made available for premarket testing. (To obtain marketing approval of their products from the
The bill also would remove a statutory requirement that manufacturers of generic or biosimilar versions of certain drugs that carry a significant risk of serious side effects use the same risk management system as the brand-name reference drug to ensure safe use of the product. Instead, it would provide the FDA with more discretion to allow those manufacturers to use comparable safety systems on a case-by- case basis.
CBO expects that the bill's provisions would allow generic drugs (including biosimilar versions of biologics) to enter the market earlier, on average, than they would under current law. Because of the earlier entry of lower-priced generic drugs, CBO estimates, enacting the legislation would reduce federal spending on prescription drugs and subsidies for health insurance. In total, CBO estimates that enacting H.R. 965 would decrease the deficit by
CBO also estimates that implementing H.R. 965 would decrease spending subject to appropriation by
The estimated budgetary effect of H.R 965 is shown in Table 1. The effects of the legislation fall primarily within budget functions 550 (health), and 570 (Medicare).
TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF H.R. 965
View table at https://www.congress.gov/congressional-report/116th-congress/house-report/55/1?s=1&r=4
The CBO staff contact for this estimate is
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the
Statement of General Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII, the general performance goal or objective of this legislation is to promote competition in the market for drugs and biological products by facilitating the timely entry of lower-cost generic and biosimilar versions of those drugs and biological products.
Duplication of Federal Programs
Pursuant to clause 3(c)(5) of rule XIII, no provision of H.R. 965 is known to be duplicative of another Federal program, including any program that was included in a report to
Committee Cost Estimate
Pursuant to clause 3(d)(1) of rule XIII, the Committee adopts as its own the cost estimate prepared by the Director of the
Earmarks, Limited Tax Benefits, and Limited Tariff Benefits
Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the Committee finds that H.R. 965 contains no earmarks, limited tax benefits, or limited tariff benefits.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b) of the Federal Advisory Committee Act were created by this legislation.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to the terms and conditions of employment or access to public services or accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act.
Section-by-Section Analysis of the Legislation
Section 1. Short title
Section 1 states that the Act may be cited as the "Creating and Restoring Equal Access to Equivalent Samples Act of 2019" or the "CREATES Act of 2019".
Section 2. Actions for delays of generic drugs and biosimilar biological products
Subsection (a) clarifies the meaning of key terms used in the legislation. Such terms include:
"Commercially Reasonable, Market-Based Terms" to include only the following: a non- discriminatory price that is at or below the most recent wholesale acquisition cost for that drug product and a schedule for delivery that meets the required timelines outlined in the bill.
"Covered Product" as any drug approved under section 505 or any biological product that is licensed under section 351 of the Public Health Services Act (PHSA), including any combination of products and when reasonably necessary to demonstrate sameness, biosimilarity, or interchangeability, any product, including any device, that is marketed or intended for use with such drug or biological product. This definition is intended to include all drug products and biologics with the exception of products that are on the drug shortage list under section 506E of the Federal Food, Drug, and Cosmetic Act, unless the product has been on the shortage list continuously for more than 6 months or the Secretary determines that inclusion of the drug in the covered product definition is likely to contribute to alleviating or preventing a shortage.
"Eligible Product Developer" as a person that seeks to develop an application for the approval of a drug under section 505(b) or 505(j) or the licensing of a biological product under section 351 of the PHSA. This definition is intended to include developers of generic products, 505(b)(2) drug products, and biosimilars.
"License Holder" refers to the holder of an application or a license for a covered product (including the holder's agents, wholesalers, distributors, assigns, and corporate affiliates).
"Sufficient Quantities" refers to an amount of the covered product that the eligible product developer determines allows it to conduct the necessary testing to support their application and meet any additional regulatory requirements.
Subsection (b) allows an eligible product developer to bring a civil action against a license holder if the license holder has refused to provide sufficient quantities of the covered product to the eligible product developer on commercially reasonable, market-based terms.
Paragraph (b)(2) sets out a series of elements that the eligible product developer must prove by a preponderance of evidence to prevail in their case. Evidence for such a case would include: as of the date the civil action is filed that the eligible product developer has not obtained sufficient quantities of the covered product on commercially reasonable, market-based terms; that the eligible product developer had made a request; and that the license holder has not delivered to the eligible product developer sufficient quantities of the covered product on commercially reasonable, market-based terms.
Further, paragraph (b)(2) allows eligible product developers to request authorization to access products subject to REMS with elements to assure safe use (ETASU) if they meet certain safety conditions or otherwise satisfy the FDA that such protections will be provided, to receive from FDA authorization to obtain an individual covered product for development and testing purposes. The committee intends this subparagraph to require the FDA to make an authorization decision within 120 days of receiving such request. It further provides that the contents of such request must meet FDA requirements to provide safety protections comparable to those provided by the REMS for the covered product, including specific conditions related to protections for any clinical trial protocols.
Paragraph (b)(3) establishes several affirmative defenses for the license holder, including to show that it has placed no restrictions on its agents, distributors, or wholesalers to sell covered products to generic manufacturers; that the product can be purchased by the generic manufacturer in sufficient quantities on commercially reasonable, market-based terms; or that the license holder made an offer via appropriate means to sell sufficient quantities of the covered product to the eligible product developer at commercially-reasonable, market-based terms and that the eligible product developer did not accept the offer within a reasonable timeframe.
Paragraph (b)(4) specifies that a written request, offer to sell, or acceptive of such offer of a covered product between the eligible product developer and license holder shall be made by certified or registered mail with return receipt requests; personal delivery; or electronic means.
Paragraph (b)(5) provides three remedies available to the court if the eligible product developer prevails. First, the court shall order that the license holder provide without delay sufficient quantities of the covered product on commercially reasonable, market-based terms to the eligible product developer. Second, the court shall also award reasonable attorney's fees and costs of the civil action to the eligible product developer. And finally, the court shall also award a monetary amount sufficient to deter the license holder from failing to provide sufficient quantities of a covered product on commercially reasonable, market-based terms.
Subsection (c) provides that a license holder shall not be liable for any claim arising out of the failure of an eligible product developer to follow adequate safeguards to assure safe use of the covered product during development or testing activities described in this section, including transportation, handling, use, or disposal of the covered product by the eligible product developer.
Subsection (d) clarifies that the provision of samples from a license holder to an eligible product developer is not a violation of REMS requirements.
Subsection (e) clarifies the term "antitrust laws" and specifies that nothing in this section shall be construed to limit the operation of any provision of the antitrust laws.
Section 3. REMS approval process for subsequent filers
Section 3 provides the FDA with the authority to waive the requirement that brand and generic developers participate in a shared safety protocol and clarifies that a generic drug developer would only be allowed to develop their own protocol if the FDA determines to their satisfaction that the generic protocol, while different, provides the same level of patient safety protections as the previously approved brand protocol.
Section 4. Rule of construction
Section 4 clarifies that this legislation does not require eligible product developers to obtain an authorization before seeking access to samples, and that the bill does not negate any requirements related to REMS with ETASU.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of the
FEDERAL FOOD, DRUG, AND COSMETIC ACT
The full text of the report is found at: https://www.congress.gov/congressional-report/116th-congress/house-report/55/1?s=1&r=4
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