The “Creating and Restoring Equal Access To Equivalent Samples Act of 2017” or the “CREATES Act of 2017” is a bill in the Senate that is intended to expedite the development of generic alternatives in situations where the license holders (owners of the name brand drug) may be preventing would-be generic developers from obtaining sufficient quantities of a drug for testing. The bill notes that the Director of the Center for Drug Evaluation and Research at the Food and Drug Administration has testified that some manufacturers of covered products have used REMS 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.

REMS is an acronym that refers to a risk evaluation and mitigation strategy. REMS with ETASU means a REMS that contains elements to assure safe use. The FDA can require REMS for drugs with serious safety concerns to help ensure safe use.

The problem of license holders refusing to provide REMS-restricted drugs has been dealt with at times in the courts. Antitrust lawsuits have been filed against license holders by would- be generic developers. In most of those cases, settlements were reached. The bill acknowledges the possibility of antitrust action to remedy situations where license holders withhold products. However, it seeks to provide a legal pathway to help ensure that generic product developers can obtain necessary quantities of a covered product in a timely manner.

To compel license holders to provide sufficient quantities of products for testing, the bill provides the following 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;

(ii) award to the eligible product developer reasonable attorney fees and costs of the civil action; 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; or

(II) that the license holder failed to comply with an order issued under clause (i).

A recent article in Investor's Business Daily claims that this bill, and a similar bill in the house (we will examine it next) would expose license holders to liability for patient harm and would strip the FDA of its watchdog role in evaluating, approving, and monitoring generics developers' REMS plans. If true, these are serious concerns.

It should be noted that the IBD article author, Peter J. Pitts, is a former FDA associate commissioner and is also president of the Center for Medicine in the Public Interest (CPMI). A thinkprogress.org article has referred to CPMI as a “Shadowy Corporate Front Group”. The term “Orwellian” admittedly gets used too often, but the thinkprogress article cites a number of examples that, if true, make the term seem aptly applied to the name “Center for Medicine in the Public Interest”.

So what about the IBD article that claims that license holders will be exposed to unreasonable liability by the provisions of the bill? Here is what the bill includes to mitigate license holder's liability,

“Limitation Of Liability.—A license holder for a covered product 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.”

This seems like a fairly broad limitation. Perhaps some additional language requiring the product developer to indemnify the license holder against certain types of lawsuits would make sense.

How about the IBD article's claim that the FDA would be stripped of oversight of generics developers' REMS plans? The bill addresses this with the following language:

“…adding at the end the following:

“...(iii) accommodate different approved risk evaluation and mitigation strategies for a reference drug product and a drug that is the subject of an abbreviated new drug application.”; and

(2) in subsection (i)(1), by striking subparagraph (B) and inserting the following:

“(B) Elements to assure safe use, if required under subsection (f) for the listed drug.

“(i) Subject to clause (ii), a drug that is the subject of an abbreviated new drug application may use—

“(I) a single, shared system with the listed drug under subsection (f); or

“(II) a different, comparable aspect of the elements to assure safe use under subsection (f).

“(ii) The Secretary may require a drug that is the subject of an abbreviated new drug application and the listed drug to use a single, shared system under subsection (f), if the Secretary determines that no different, comparable aspect of the elements to assure safe use could satisfy the requirements of subsection (f).”.

“Secretary” in the section above refers to the Secretary of Health and Human Services. The FDA is an HHS agency. This appears to still provide for the government to oversee REMS requirements for subsequent filers.

This bill would add significant incentive for name brand license holders to provide sufficient quantities of REMS-restricted drugs for generic development and close a loophole that may be exploited as part of “patent extension” strategies.

The entire text of the bill can be found here