CREATES Act of 2019

II Calendar No. 22 116TH CONGRESS 1ST SESSION S. 340 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. IN THE SENATE OF THE UNITED STATES FEBRUARY 5, 2019 Mr. LEAHY (for himself, Mr. GRASSLEY, Ms. KLOBUCHAR, Mr. LEE, Mrs. FEINSTEIN, Ms. BALDWIN, Mr. BLUMENTHAL, Mr. BOOKER, Mr. BROWN, Ms. COLLINS, Mr. COTTON, Mr. CRUZ, Mr. DAINES, Mr. DUR- BIN, Ms. ERNST, Mrs. FISCHER, Ms. HASSAN, Mr. KENNEDY, Mr. KING, Mr. MENENDEZ, Ms. MURKOWSKI, Mr. PAUL, Mr. ROUNDS, Ms. SMITH, Ms. STABENOW, Mr. TESTER, Mr. WHITEHOUSE, and Mr. YOUNG) intro- duced the following bill; which was read the first time FEBRUARY 6, 2019 Read the second time and placed on the calendar A BILL To promote competition in the market for drugs and biologi- cal products by facilitating the timely entry of lower- cost generic and biosimilar versions of those drugs and biological products. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 22:11 Feb 06, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S340.PCS S340 pbinns on DSK79D2C42PROD with BILLS 2 •S 340 PCS SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Creating and Restoring 2 Equal Access to Equivalent Samples Act of 2019’’ or the 3 ‘‘CREATES Act of 2019’’. 4 SEC. 2. FINDINGS. 5 Congress finds the following: 6 (1) It is the policy of the United States to pro- 7 mote competition in the market for drugs and bio- 8 logical products by facilitating the timely entry of 9 low-cost generic and biosimilar versions of those 10 drugs and biological products. 11 (2) Since their enactment in 1984 and 2010, 12 respectively, the Drug Price Competition and Patent 13 Term Restoration Act of 1984 (Public Law 98–417; 14 98 Stat. 1585) and the Biologics Price Competition 15 and Innovation Act of 2009 (subtitle A of title VII 16 of Public Law 111–148; 124 Stat. 804), have pro- 17 vided pathways for making lower-cost versions of 18 previously approved drugs and previously licensed bi- 19 ological products available to the people of the 20 United States in a timely manner, thereby lowering 21 overall prescription drug costs for patients and tax- 22 payers by billions of dollars each year. 23 (3) In order for these pathways to function as 24 intended, developers of generic drugs and biosimilar 25 biological products (referred to in this section as 26 VerDate Sep 11 2014 22:11 Feb 06, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S340.PCS S340 pbinns on DSK79D2C42PROD with BILLS 3 •S 340 PCS ‘‘generic product developers’’) must be able to obtain 1 quantities of the reference listed drug or biological 2 product with which the generic drug or biosimilar bi- 3 ological product is intended to compete (referred to 4 in this section as a ‘‘covered product’’) for purposes 5 of supporting an application for approval by the 6 Food and Drug Administration, including for testing 7 to show that— 8 (A) a prospective generic drug is bioequiva- 9 lent to the covered product in accordance with 10 subsection (j) of section 505 of the Federal, 11 Food, Drug, and Cosmetic Act (21 U.S.C. 12 355), or meets the requirements for approval of 13 an application submitted under subsection 14 (b)(2) of that section; or 15 (B) a prospective biosimilar biological 16 product is biosimilar to or interchangeable with 17 its reference biological product under section 18 351(k) of the Public Health Service Act (42 19 U.S.C. 262(k)), as applicable. 20 (4) For drugs and biological products that are 21 subject to a risk evaluation and mitigation strategy, 22 another essential component in the creation of low- 23 cost generic and biosimilar versions of covered prod- 24 ucts is the ability of generic product developers to 25 VerDate Sep 11 2014 22:11 Feb 06, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S340.PCS S340 pbinns on DSK79D2C42PROD with BILLS 4 •S 340 PCS join the manufacturer of the covered product (re- 1 ferred to in this section as the ‘‘license holder’’) in 2 a single, shared system of elements to assure safe 3 use and supporting agreements as required by sec- 4 tion 505–1 of the Federal Food, Drug, and Cosmetic 5 Act (21 U.S.C. 355–1), or secure a variance there- 6 from. 7 (5) Contrary to the policy of the United States 8 to promote competition in the market for drugs and 9 biological products by facilitating the timely entry of 10 lower-cost generic and biosimilar versions of those 11 drugs and biological products, certain license holders 12 are preventing generic product developers from ob- 13 taining quantities of the covered product necessary 14 for the generic product developer to support an ap- 15 plication for approval by the Food and Drug Admin- 16 istration, including testing to show bioequivalence, 17 biosimilarity, or interchangeability to the covered 18 product, in some instances based on the justification 19 that the covered product is subject to a risk evalua- 20 tion and mitigation strategy with elements to assure 21 safe use under section 505–1 of the Federal Food, 22 Drug, and Cosmetic Act (21 U.S.C. 355–1). 23 (6) The Director of the Center for Drug Eval- 24 uation and Research of the Food and Drug Adminis- 25 VerDate Sep 11 2014 22:11 Feb 06, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S340.PCS S340 pbinns on DSK79D2C42PROD with BILLS 5 •S 340 PCS tration has testified that some manufacturers of cov- 1 ered products have used risk evaluation and mitiga- 2 tion strategies and distribution restrictions adopted 3 by the manufacturer on their own behalf as reasons 4 to not sell quantities of a covered product to generic 5 product developers, causing barriers and delays in 6 getting generic products on the market. The Food 7 and Drug Administration has reported receiving sig- 8 nificant numbers of inquiries from generic product 9 developers who were unable to obtain samples of cov- 10 ered products to conduct necessary testing and oth- 11 erwise meet requirements for approval of generic 12 drugs. 13 (7) In 2018, the Acting Chairman of the Fed- 14 eral Trade Commission testified that the Federal 15 Trade Commission continues to be very concerned 16 about potential abuses by manufacturers of brand 17 drugs of risk evaluation and mitigation strategies or 18 other closed distribution systems to impede generic 19 competition. 20 (8) Also contrary to the policy of the United 21 States to promote competition in the market for 22 drugs and biological products by facilitating the 23 timely entry of lower-cost generic and biosimilar 24 versions of those drugs and biological products, cer- 25 VerDate Sep 11 2014 22:11 Feb 06, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S340.PCS S340 pbinns on DSK79D2C42PROD with BILLS 6 •S 340 PCS tain license holders are impeding the prompt nego- 1 tiation and development on commercially reasonable 2 terms of a single, shared system of elements to as- 3 sure safe use, which may be necessary for the ge- 4 neric product developer to gain approval for its drug 5 or licensing for its biological product. 6 (9) While the antitrust laws may address the 7 refusal by some license holders to provide quantities 8 of a covered product to a generic product developer, 9 a more tailored legal pathway would help ensure 10 that generic product developers can obtain necessary 11 quantities of a covered product in a timely way for 12 purposes of developing a generic drug or biosimilar 13 biological product, facilitating competition in the 14 marketplace for drugs and biological products. 15 (10) The antitrust laws may address actions by 16 license holders who impede the prompt negotiation 17 and development of a single, shared system of ele- 18 ments to assure safe use, and the Food and Drug 19 Administration has some authority to waive the re- 20 quirement of a single, shared system. Clearer regu- 21 latory authority to approve different systems that 22 meet the statutory requirements to ensure patient 23 safety, however, would limit the effectiveness of bad 24 faith negotiations over single, shared systems to 25 VerDate Sep 11 2014 22:11 Feb 06, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S340.PCS S340 pbinns on DSK79D2C42PROD with BILLS 7 •S 340 PCS delay generic approval. At the same time, clearer 1 regulatory authority would ensure all systems pro- 2 tect patient safety. 3 SEC. 3. ACTIONS FOR DELAYS OF GENERIC DRUGS AND 4 BIOSIMILAR BIOLOGICAL PRODUCTS. 5 (a) DEFINITIONS.—In this section— 6 (1) the term ‘‘commercially reasonable, market- 7 based terms’’ means— 8 (A) a non-discriminatory price for the sale 9 of the covered product at or below, but not 10 greater than, the most recent wholesale acquisi- 11 tion cost for the drug, as defined in section 12 1847A(c)(6)(B) of the Social Security Act (42 13 U.S.C. 1395w–3a(c)(6)(B)); 14 (B) a schedule for delivery that results in 15 the transfer of the covered product to the eligi- 16 ble product developer consistent with the timing 17 under subsection (b)(2)(A)(iv); and 18 (C) no additional conditions are imposed 19 on the sale of the covered product; 20 (2) the term ‘‘covered product’’— 21 (A) means— 22 (i) any drug approved under sub- 23 section (c) or (j) of section 505 of the Fed- 24 eral Food, Drug, and Cosmetic Act (21 25 VerDate Sep 11 2014 22:11 Feb 06, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S340.PCS S340 pbinns on DSK79D2C42PROD with BILLS 8 •S 340 PCS U.S.C. 355) or biological product licensed 1 under subsection (a) or (k) of section 351 2 of the Public Health Service Act (42 3 U.S.C. 262); 4 (ii) any combination of a drug or bio- 5 logical product described in clause (i); or 6 (iii) when reasonably necessary to 7 support approval of an application under 8 section 505 of the Federal Food, Drug, 9 and Cosmetic Act (21 U.S.C. 355), or sec- 10 tion 351 of the Public Health Service Act 11 (42 U.S.C. 262), as applicable, or other- 12 wise meet the requirements for approval 13 under either such section, any product, in- 14 cluding any device, that is marketed or in- 15 tended for use with such a drug or biologi- 16 cal product; and 17 (B) does not include any drug or biological 18 product that appears on the drug shortage list 19 in effect under section 506E of the Federal 20 Food, Drug, and Cosmetic Act (21 U.S.C. 21 356e), unless the shortage will not be promptly 22 resolved— 23 VerDate Sep 11 2014 22:11 Feb 06, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S340.PCS S340 pbinns on DSK79D2C42PROD with BILLS 9 •S 340 PCS (i) as demonstrated by the fact that 1 the drug or biological product has been in 2 shortage for more than 6 months; or 3 (ii) as otherwise determined by the 4 Secretary; 5 (3) the term ‘‘device’’ has the meaning given 6 the term in section 201 of the Federal Food, Drug, 7 and Cosmetic Act (21 U.S.C. 321); 8 (4) the term ‘‘eligible product developer’’ means 9 a person that seeks to develop a product for ap- 10 proval pursuant to an application for approval under 11 subsection (b)(2) or (j) of section 505 of the Federal 12 Food, Drug, and Cosmetic Act (21 U.S.C. 355) or 13 for licensing pursuant to an application under sec- 14 tion 351(k) of the Public Health Service Act (42 15 U.S.C. 262(k)); 16 (5) the term ‘‘license holder’’ means the holder 17 of an application approved under subsection (c) or 18 (j) of section 505 of the Federal Food, Drug, and 19 Cosmetic Act (21 U.S.C. 355) or the holder of a li- 20 cense under subsection (a) or (k) of section 351 of 21 the Public Health Service Act (42 U.S.C. 262) for 22 a covered product; 23 (6) the term ‘‘REMS’’ means a risk evaluation 24 and mitigation strategy under section 505–1 of the 25 VerDate Sep 11 2014 22:11 Feb 06, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S340.PCS S340 pbinns on DSK79D2C42PROD with BILLS 10 •S 340 PCS Federal Food, Drug, and Cosmetic Act (21 U.S.C. 1 355–1); 2 (7) the term ‘‘REMS with ETASU’’ means a 3 REMS that contains elements to assure safe use 4 under section 505–1(f) of the Federal Food, Drug, 5 and Cosmetic Act (21 U.S.C. 355–1(f)); 6 (8) the term ‘‘Secretary’’ means the Secretary 7 of Health and Human Services; 8 (9) the term ‘‘single, shared system of elements 9 to assure safe use’’ means a single, shared system 10 of elements to assure safe use under section 505– 11 1(f) of the Federal Food, Drug, and Cosmetic Act 12 (21 U.S.C. 355–1(f)); and 13 (10) the term ‘‘sufficient quantities’’ means an 14 amount of a covered product that allows the eligible 15 product developer to— 16 (A) conduct testing to support an applica- 17 tion under— 18 (i) subsection (b)(2) or (j) of section 19 505 of the Federal Food, Drug, and Cos- 20 metic Act (21 U.S.C. 355); or 21 (ii) section 351(k) of the Public 22 Health Service Act (42 U.S.C. 262(k)); 23 and 24 VerDate Sep 11 2014 22:11 Feb 06, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S340.PCS S340 pbinns on DSK79D2C42PROD with BILLS 11 •S 340 PCS (B) fulfill any regulatory requirements re- 1 lating to approval of such an application. 2 (b) CIVIL ACTION FOR FAILURE TO PROVIDE SUFFI- 3 CIENT QUANTITIES OF A COVERED PRODUCT.— 4 (1) IN GENERAL.—An eligible product developer 5 may bring a civil action against the license holder 6 for a covered product seeking relief under this sub- 7 section in an appropriate district court of the United 8 States alleging that the license holder has declined 9 to provide sufficient quantities of the covered prod- 10 uct to the eligible product developer on commercially 11 reasonable, market-based terms. 12 (2) ELEMENTS.— 13 (A) IN GENERAL.—To prevail in a civil ac- 14 tion brought under paragraph (1), an eligible 15 product developer shall prove, by a preponder- 16 ance of the evidence— 17 (i) that— 18 (I) the covered product is not 19 subject to a REMS with ETASU; or 20 (II) if the covered product is sub- 21 ject to a REMS with ETASU— 22 (aa) the eligible product de- 23 veloper has obtained a covered 24 product authorization from the 25 VerDate Sep 11 2014 22:11 Feb 06, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S340.PCS S340 pbinns on DSK79D2C42PROD with BILLS 12 •S 340 PCS Secretary in accordance with sub- 1 paragraph (B); and 2 (bb) the eligible product de- 3 veloper has provided a copy of 4 the covered product authorization 5 to the license holder; 6 (ii) that, as of the date on which the 7 civil action is filed, the product developer 8 has not obtained sufficient quantities of 9 the covered product on commercially rea- 10 sonable, market-based [Text truncated for display. 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