HR 965 — CREATES Act of 2019

Deutch, Mr.

Langevin, Mr.

Cooper, Mrs.

McBath, Mr.

Raskin, Ms.

Mucarsel-Powell, Mr.

Stanton, Mr.

Jordan, Ms.

Wild, Mr.

Cohen, Mr.

Kim, Ms.

Schrier, Mr.

Joyce of Ohio, Mr.

Case, Mr.

Khanna, Mr.

David Scott of Georgia, Ms.

Houlahan, Mr.

Casten of Illinois, Mr.

Norman, Ms.

Pingree, Mr.

Carbajal, Mr.

Smith of Washington, Ms.

Wexton, Mr.

Cisneros, Mr.

Connolly, Ms.

Underwood, Ms.

Garcia of Texas, Ms.

Meng, and Mrs.

Bustos May 10, 2019 Reported from the Committee on Energy and Commerce with an amendment [Strike out all after the enacting clause and insert the part printed in italic] May 10, 2019 Reported from the Committee on the Judiciary;

committed to the Committee of the Whole House on the State of the Union and ordered to be printed [For text of introduced bill, see copy of bill as introduced on February 5, 2019] _______________________________________________________________________ A BILL 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.

FINDINGS.

Congress finds the following:

(1) It is the policy of the United States to promote competition in the market for drugs and biological products by facilitating the timely entry of low-cost generic and biosimilar versions of those drugs and biological products.

(2) Since their enactment in 1984 and 2010, respectively, the Drug Price Competition and Patent Term Restoration Act of (Public Law 98-417;

98 Stat.

1585) and the Biologics Price Competition and Innovation Act of 2009 (subtitle A of title VII of Public Law 111-148;

124 Stat.

804), have provided pathways for making lower-cost versions of previously approved drugs and previously licensed biological products available to the people of the United States in a timely manner, thereby lowering overall prescription drug costs for patients and taxpayers by billions of dollars each year.

(3) In order for these pathways to function as intended, developers of generic drugs and biosimilar biological products (referred to in this section as ``generic product developers'') must be able to obtain quantities of the reference listed drug or biological product with which the generic drug or biosimilar biological product is intended to compete (referred to in this section as a ``covered product'') for purposes of supporting an application for approval by the Food and Drug Administration, including for testing to show that-- (A) a prospective generic drug is bioequivalent to the covered product in accordance with subsection (j) of section 505 of the Federal, Food, Drug, and Cosmetic Act (21 U.S.C.

355), or meets the requirements for approval of an application submitted under subsection (b)(2) of that section;

or (B) a prospective biosimilar biological product is biosimilar to or interchangeable with its reference biological product under section 351(k) of the Public Health Service Act (42 U.S.C.

262(k)), as applicable.

(4) For drugs and biological products that are subject to a risk evaluation and mitigation strategy, another essential component in the creation of low-cost generic and biosimilar versions of covered products is the ability of generic product developers to join the manufacturer of the covered product (referred to in this section as the ``license holder'') in a single, shared system of elements to assure safe use and supporting agreements as required by section 505-1 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.

355-1), or secure a variance therefrom.

(5) Contrary to the policy of the United States 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, certain license holders are preventing generic product developers from obtaining quantities of the covered product necessary for the generic product developer to support an application for approval by the Food and Drug Administration, including testing to show bioequivalence, biosimilarity, or interchangeability to the covered product, in some instances based on the justification that the covered product is subject to a risk evaluation and mitigation strategy with elements to assure safe use under section 505-1 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.

355-1).

(6) The Director of the Center for Drug Evaluation and Research of the Food and Drug Administration has testified that some manufacturers of covered products have used risk evaluation and mitigation strategies and distribution restrictions adopted by the manufacturer on their own behalf as reasons to not sell quantities of a covered product to generic product developers, causing barriers and delays in getting generic products on the market.

The Food and Drug Administration has reported receiving significant numbers of inquiries from generic product developers who were unable to obtain samples of covered products to conduct necessary testing and otherwise meet requirements for approval of generic drugs.

(7) In 2018, the Acting Chairman of the Federal Trade Commission testified that the Federal Trade Commission continues to be very concerned about potential abuses by manufacturers of brand drugs of risk evaluation and mitigation strategies or other closed distribution systems to impede generic competition.

(8) Also contrary to the policy of the United States 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, certain license holders are impeding the prompt negotiation and development on commercially reasonable terms of a single, shared system of elements to assure safe use, which may be necessary for the generic product developer to gain approval for its drug or licensing for its biological product.

(9) While the antitrust laws may address the refusal by some license holders to provide quantities of a covered product to a generic product developer, a more tailored legal pathway would help ensure that generic product developers can obtain necessary quantities of a covered product in a timely way for purposes of developing a generic drug or biosimilar biological product, facilitating competition in the marketplace for drugs and biological products.

(10) The antitrust laws may address actions by license holders who impede the prompt negotiation and development of a single, shared system of elements to assure safe use, and the Food and Drug Administration has some authority to waive the requirement of a single, shared system.

Clearer regulatory authority to approve different systems that meet the statutory requirements to ensure patient safety, however, would limit the effectiveness of bad faith negotiations over single, shared systems to delay generic approval.

At the same time, clearer regulatory authority would ensure all systems protect patient safety.

SEC.

3.

356e), unlessunless-- (i) the shortagedrug willor notbiological beproduct promptlyhas resolved--been (i)on as demonstrated by the factdrug thatshortage thelist drugin oreffect biologicalunder productsuch hassection been506E incontinuously shortage for more than 6 months;

or (ii) asthe otherwiseSecretary determineddetermines bythat inclusion of the Secretary;drug or biological product as a covered product is likely to contribute to alleviating or preventing a shortage.

and (10) the term ``sufficient quantities'' means an amount of a covered product that allows the eligible product developer determines allows it to-- (A) conduct testing to support an application under-- (i) subsection (b)(2) or (j) of section 505 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.

or (B) that-- (i) the license holder sells the covered product through agents, distributors, or wholesalers;

and (iii) the covered product can be purchased by the eligible product developer in sufficient quantities on commercially reasonable, market- based terms from the agents, distributors, or wholesalers of the license holder.holder;

(4)or Remedies.--(C) (A)that Inthe general.--Iflicense holder made an offer to sell sufficient quantities of the covered product to the eligible product developer prevailsat incommercially reasonable market-based terms-- (i) for a civilcovered actionproduct broughtthat underis paragraphnot (1),subject to a REMS with ETASU, by the courtdate shall--that (i)is order14 days after the date on which the license holder toreceived providethe torequest for the covered product, and the eligible product developer withoutdid delaynot sufficientaccept quantitiessuch ofoffer by the covereddate productthat is 7 days after the date on commerciallywhich reasonable,the market-basedeligible terms;product developer received such offer from the license holder;

or (ii) for a covered product that is subject to a REMS with ETASU, by the date that is 20 days after the date on which the license holder received the request for the covered product, and the eligible product developer did not accept such offer by the date that is 10 days after the date on which the eligible product developer received such offer from the license holder.

(4) Methods for transmission of requests for covered products.--A written request for a covered product, offer to sell a covered product, or acceptance of such an offer between the eligible product developer and the license holder shall be made by-- (A) certified or registered mail with return receipt requested;

(B) personal delivery;

or (C) electronic means.

(5) Remedies.-- (A) In general.--If an eligible product developer prevails in a civil action brought under paragraph (1), the court shall-- (i) order the license holder to provide to the eligible product developer without delay sufficient quantities of the covered product on commercially reasonable, market-based terms;

and (iii) award to the eligible product developer a monetary amount sufficient to deter the license holder from failing to provide other eligible product developers with sufficient quantities of a covered product on commercially reasonable, market-based terms, if the court finds, by a preponderance of the evidence-- (I) that the license holder delayed providing sufficient quantities of the covered product to the eligible product developer without a legitimate business justification;

(d) No Violation of REMS.--TheREMS.--Section provision of samples of a drug pursuant to an authorization under subsection (b)(2)(B) shall not be considered a violation of the requirements of any risk evaluation and mitigation strategy that may be in place under section 505-1 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.

355-1) foris suchamended drug.by adding at the end the following new subsection:

``(l) Provision of Samples Not a Violation of Strategy.--The provision of samples of a covered product to an eligible product developer (as those terms are defined in section 2(a) of the Creating and Restoring Equal Access to Equivalent Samples Act of 2019) shall not be considered a violation of the requirements of any risk evaluation and mitigation strategy that may be in place under this section for such drug.''.

4.3.

355-1)355-1), as amended by section 2, is further amended-- (1) in subsection (g)(4)(B)-- (A) in clause (i) by striking ``or'' after the semicolon;

``(iii) accommodate different, comparable approvedaspects riskof evaluationthe andelements mitigationto strategiesassure safe use for a drug that is the subject of an application under section 505(j), and the applicable listed drug.'';

and (3) in subsection (i), by adding at the end the following:

``(l)``(3) SeparateShared REMS.--Whenrems.--If usedthe Secretary approves, in thisaccordance section,with theparagraph terms(1)(C)(i)(II), ``different,a different, comparable aspect of the elements to assure safe use''use orunder ``different,subsection comparable(f) approved risk evaluation and mitigation strategies'' means a risk evaluation and mitigation strategy for a drug that is the subject of an abbreviated new drug application under section 505(j)505(j), thatthe usesSecretary differentmay methodsrequire orthat operationalsuch meansdifferent thancomparable theaspect strategyof requiredthe underelements subsectionto (a)assure forsafe theuse applicablecan listedbe drug,used orwith otherrespect applicationto underany sectionother 505(j)drug withthat is the samesubject suchof listedan drug,application butunder achievessection the505(j) sameor level505(b) ofthat safetyreferences asthe suchsame strategy.''.listed drug.'';

<all>and (4) by adding at the end the following:

``(m) Separate REMS.--When used in this section, the terms `different, comparable aspect of the elements to assure safe use' or `different, comparable approved risk evaluation and mitigation strategies' means a risk evaluation and mitigation strategy for a drug that is the subject of an application under section 505(j) that uses different methods or operational means than the strategy required under subsection (a) for the applicable listed drug, or other application under section 505(j) with the same such listed drug, but achieves the same level of safety as such strategy.''.

SEC.

4.

RULE OF CONSTRUCTION.

(a) In General.--Nothing in this Act, the amendments made by this Act, or in section 505-1 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.

355-1), shall be construed as-- (1) prohibiting a license holder from providing an eligible product developer access to a covered product in the absence of an authorization under this Act;

or (2) in any way negating the applicability of a REMS with ETASU, as otherwise required under such section 505-1, with respect to such covered product.

(b) Definitions.--In this section, the terms ``covered product'', ``eligible product developer'', ``license holder'', and ``REMS with ETASU'' have the meanings given such terms in section 3(a).

Union Calendar No.

33 116th CONGRESS 1st Session H.

R.

965 [Report No.

116-55, Parts I and II] _______________________________________________________________________ A BILL 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.

_______________________________________________________________________ May 10, 2019 Reported from the Committee on Energy and Commerce with an amendment May 10, 2019 Reported from the Committee on the Judiciary;

committed to the Committee of the Whole House on the State of the Union and ordered to be printed