II 

Calendar No. 482 

115TH CONGRESS 

2D SESSION S. 974 

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 

APRIL 27, 2017 

Mr. LEAHY (for himself, Mr. GRASSLEY, Ms. KLOBUCHAR, Mr. LEE, Mrs. 

FEINSTEIN, Mrs. MCCASKILL, Ms. COLLINS, Mr. MCCAIN, Mr. 

BLUMENTHAL, Mr. WHITEHOUSE, Mr. COTTON, Mr. DURBIN, Mr. CRUZ, 

Mr. PAUL, Ms. HASSAN, Mr. KENNEDY, Ms. SMITH, Ms. MURKOWSKI, 

Ms. BALDWIN, Mr. DAINES, Mr. KING, Mr. GRAHAM, Mr. BROWN, Mr. 

YOUNG, Ms. STABENOW, Mr. ROUNDS, Mr. TESTER, Mrs. ERNST, and 

Mr. MENENDEZ) introduced the following bill; which was read twice and 

referred to the Committee on the Judiciary 

JUNE 21, 2018 

Reported by Mr. GRASSLEY, with an amendment 

[Strike out all after the enacting clause and insert the part printed in italic] 

A BILL 

To promote competition in the market for drugs and biological products by facilitating the timely entry of lowercost generic and biosimilar versions of those drugs and 

biological products. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Creating and Restoring 

3 Equal Access To Equivalent Samples Act of 2017’’ or the 

4 ‘‘CREATES Act of 2017’’. 

5 SEC. 2. FINDINGS. 

6 Congress finds the following: 

7 (1) It is the policy of the United States to pro8 mote competition in the market for drugs and bio9 logical products by facilitating the timely entry of 

10 low-cost generic and biosimilar versions of those 

11 drugs and biological products. 

12 (2) Since their enactment in 1984 and 2010, 

13 respectively, the Drug Price Competition and Patent 

14 Term Restoration Act of 1984 (Public Law 98–417; 

15 98 Stat. 1585) and the Biologics Price Competition 

16 and Innovation Act of 2009 (Subtitle A of title VII 

17 of Public Law 111–148; 124 Stat. 804), have pro18 vided pathways for making lower-cost versions of 

19 previously approved drugs and previously licensed bi20 ological products available to the people of the 

21 United States in a timely manner, thereby lowering 

22 overall prescription drug costs for patients and tax23 payers by billions of dollars each year. 

24 (3) In order for these pathways to function as 

25 intended, developers of generic drugs and biosimilar 

26 biological products (referred to in this section as 


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1 ‘‘generic product developers’’) must be able to obtain 

2 quantities of the reference listed drug or biological 

3 product with which the generic drug or biosimilar bi4 ological product is intended to compete (referred to 

5 in this section as a ‘‘covered product’’) for purposes 

6 of supporting an application for approval by the 

7 Food and Drug Administration, including for testing 

8 to show that— 

9 (A) a prospective generic drug is bioequiva10 lent to the covered product in accordance with 

11 subsection (j) of section 505 of the Federal, 

12 Food, Drug, and Cosmetic Act (21 U.S.C. 

13 355), or meets the requirements for approval of 

14 an application submitted under subsection 

15 (b)(2) of that section; or 

16 (B) a prospective biosimilar biological 

17 product is biosimilar to or interchangeable with 

18 its reference biological product under section 

19 351(k) of the Public Health Service Act (42 

20 U.S.C. 262(k)), as applicable. 

21 (4) For drugs and biological products that are 

22 subject to a risk evaluation and mitigation strategy, 

23 another essential component in the creation of low24 cost generic and biosimilar versions of covered prod25 ucts is the ability of generic product developers to 


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1 join the manufacturer of the covered product (re2 ferred to in this section as the ‘‘license holder’’) in 

3 a single, shared system of elements to assure safe 

4 use and supporting agreements, or secure a variance 

5 therefrom, as required by section 505–1 of the Fed6 eral Food, Drug, and Cosmetic Act (21 U.S.C. 355– 

7 1). 

8 (5) Contrary to the policy of the United States 

9 to promote competition in the market for drugs and 

10 biological products by facilitating the timely entry of 

11 lower-cost generic and biosimilar versions of those 

12 drugs and biological products, certain license holders 

13 are preventing generic product developers from ob14 taining quantities of the covered product necessary 

15 for the generic product developer to support an ap16 plication for approval by the Food and Drug Admin17 istration, including testing to show bioequivalence, 

18 biosimilarity, or interchangeability to the covered 

19 product, in some instances based on the justification 

20 that the covered product is subject to a risk evalua21 tion and mitigation strategy with elements to assure 

22 safe use under section 505–1 of the Federal Food, 

23 Drug, and Cosmetic Act (21 U.S.C. 355–1). 

24 (6) The Director of the Center for Drug Eval25 uation and Research at the Food and Drug AdminVerDate Sep 11 2014 22:36 Jun 21, 2018 Jkt 079200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6401 E:\BILLS\S974.RS S974

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1 istration has testified that some manufacturers of 

2 covered products have used REMS and distribution 

3 restrictions adopted by the manufacturer on their 

4 own behalf as reasons to not sell quantities of a cov5 ered product to generic product developers, causing 

6 barriers and delays in getting generic products on 

7 the market. The Food and Drug Administration has 

8 reported receiving significant numbers of inquiries 

9 from generic product developers who were unable to 

10 obtain samples of covered products to conduct nec11 essary testing and otherwise meet requirements for 

12 approval of generic drugs. 

13 (7) The Chairwoman of the Federal Trade 

14 Commission has testified that the Federal Trade 

15 Commission continues to be very concerned about 

16 potential abuses by manufacturers of brand drugs of 

17 REMS or other closed distribution systems to im18 pede generic competition. 

19 (8) Also contrary to the policy of the United 

20 States to promote competition in the market for 

21 drugs and biological products by facilitating the 

22 timely entry of lower-cost generic and biosimilar 

23 versions of those drugs and biological products, cer24 tain license holders are impeding the prompt nego25 tiation and development on commercially reasonable 


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1 terms of a single, shared system of elements to as2 sure safe use, which may be necessary for the ge3 neric product developer to gain approval for its drug 

4 or licensing for its biological product. 

5 (9) While the antitrust laws may address the 

6 refusal by some license holders to provide quantities 

7 of a covered product to a generic product developer, 

8 a more tailored legal pathway would help ensure 

9 that generic product developers can obtain necessary 

10 quantities of a covered product in a timely way for 

11 purposes of developing a generic drug or biosimilar 

12 biological product, facilitating competition in the 

13 marketplace for drugs and biological products. 

14 (10) The antitrust laws may address actions by 

15 license holders who impede the prompt negotiation 

16 and development of a single, shared system of ele17 ments to assure safe use, and the Food and Drug 

18 Administration has some authority to waive the re19 quirement of a single, shared system. Clearer regu20 latory authority to approve different systems that 

21 meet the statutory requirements to ensure patient 

22 safety, however, would limit the effectiveness of bad 

23 faith negotiations over single, shared systems to 

24 delay generic approval. At the same time, clearer 


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1 regulatory authority would ensure all systems pro2 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 ‘‘covered product’’— 

7 (A) means— 

8 (i) any drug approved under sub9 section (b) or (j) of section 505 of the Fed10 eral Food, Drug, and Cosmetic Act (21 

11 U.S.C. 355) or biological product licensed 

12 under subsection (a) or (k) of section 351 

13 of the Public Health Service Act (42 

14 U.S.C. 262); 

15 (ii) any combination of a drug or bio16 logical product described in clause (i); or 

17 (iii) when reasonably necessary to 

18 demonstrate sameness, biosimilarity, or 

19 interchangeability for purposes of section 

20 505 of the Federal Food, Drug, and Cos21 metic Act (21 U.S.C. 355), or section 351 

22 of the Public Health Service Act (42 

23 U.S.C. 262), as applicable, any product, 

24 including any device, that is marketed or 


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1 intended for use with such drug or biologi2 cal product; and 

3 (B) does not include any drug or biological 

4 product that the Secretary has determined to be 

5 currently in shortage and that appears on the 

6 drug shortage list in effect under section 506E 

7 of the Federal Food, Drug, and Cosmetic Act 

8 (21 U.S.C. 356e), unless the shortage will not 

9 be promptly resolved— 

10 (i) as demonstrated by the fact that 

11 the drug or biological product has been in 

12 shortage for more than 6 months; or 

13 (ii) as otherwise determined by the 

14 Secretary; 

15 (2) the term ‘‘device’’ has the meaning given 

16 the term in section 201 of the Federal Food, Drug, 

17 and Cosmetic Act (21 U.S.C. 321); 

18 (3) the term ‘‘eligible product developer’’ means 

19 a person that seeks to develop a product for ap20 proval pursuant to an application for approval under 

21 subsection (b)(2) or (j) of section 505 of the Federal 

22 Food, Drug, and Cosmetic Act (21 U.S.C. 355) or 

23 for licensing pursuant to an application under sec24 tion 351(k) of the Public Health Service Act (42 

25 U.S.C. 262(k)); 


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1 (4) the term ‘‘license holder’’ means the holder 

2 of an application approved under subsection (c) or 

3 (j) of section 505 of the Federal Food, Drug, and 

4 Cosmetic Act (21 U.S.C. 355) or the holder of a li5 cense under subsection (a) or (k) of section 351 of 

6 the Public Health Service Act (42 U.S.C. 262) for 

7 a covered product; 

8 (5) the term ‘‘REMS’’ means a risk evaluation 

9 and mitigation strategy under section 505–1 of the 

10 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

11 355–1); 

12 (6) the term ‘‘REMS with ETASU’’ means a 

13 REMS that contains elements to assure safe use 

14 under section 505–1 of the Federal Food, Drug, and 

15 Cosmetic Act (21 U.S.C. 355–1); 

16 (7) the term ‘‘Secretary’’ means the Secretary 

17 of Health and Human Services; 

18 (8) the term ‘‘single, shared system of elements 

19 to assure safe use’’ means a single, shared system 

20 of elements to assure safe use under section 505–1 

21 of the Federal Food, Drug, and Cosmetic Act (21 

22 U.S.C. 355–1); and 

23 (9) the term ‘‘sufficient quantities’’ means an 

24 amount of a covered product that allows the eligible 

25 product developer to— 


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1 (A) conduct testing to support an applica2 tion— 

3 (i) for approval under subsection 

4 (b)(2) or (j) of section 505 of the Federal 

5 Food, Drug, and Cosmetic Act (21 U.S.C. 

6 355); or 

7 (ii) for licensing under section 351(k) 

8 of the Public Health Service Act (42 

9 U.S.C. 262(k)); and 

10 (B) fulfill any regulatory requirements re11 lating to such an application for approval or li12 censing. 

13 (b) CIVIL ACTION FOR FAILURE TO PROVIDE SUFFI14 CIENT QUANTITIES OF A COVERED PRODUCT.— 

15 (1) IN GENERAL.—An eligible product developer 

16 may bring a civil action against the license holder 

17 for a covered product seeking relief under this sub18 section in an appropriate district court of the United 

19 States alleging that the license holder has declined 

20 to provide sufficient quantities of the covered prod21 uct to the eligible product developer on commercially 

22 reasonable, market-based terms. 

23 (2) ELEMENTS.— 

24 (A) IN GENERAL.—To prevail in a civil ac25 tion brought under paragraph (1), an eligible 


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1 product developer shall prove, by a preponder2 ance of the evidence— 

3 (i) that— 

4 (I) the covered product is not 

5 subject to a REMS with ETASU; or 

6 (II) if the covered product is sub7 ject to a REMS with ETASU— 

8 (aa) the eligible product de9 veloper has obtained a covered 

10 product authorization from the 

11 Secretary in accordance with sub12 paragraph (B); and 

13 (bb) the eligible product de14 veloper has provided a copy of 

15 the covered product authorization 

16 to the license holder; 

17 (ii) that, as of the date on which the 

18 civil action is filed, the product developer 

19 has not obtained sufficient quantities of 

20 the covered product on commercially rea21 sonable, market-based terms; 

22 (iii) that the eligible product developer 

23 has requested to purchase sufficient quan24 tities of the covered product from the li25 cense holder; and 


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1 (iv) that the license holder has not de2 livered to the eligible product developer 

3 sufficient quantities of the covered product 

4 on commercially reasonable, market-based 

5 terms— 

6 (I) for a covered product that is 

7 not subject to a REMS with ETASU, 

8 by the date that is 31 days after the 

9 date on which the license holder re10 ceived the request for the covered 

11 product; and 

12 (II) for a covered product that is 

13 subject to a REMS with ETASU, by 

14 31 days after the later of— 

15 (aa) the date on which the 

16 license holder received the re17 quest for the covered product; or 

18 (bb) the date on which the 

19 license holder received a copy of 

20 the covered product authorization 

21 issued by the Secretary in ac22 cordance with subparagraph (B). 

23 (B) AUTHORIZATION FOR COVERED PROD24 UCT SUBJECT TO A REMS WITH ETASU.— 


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1 (i) REQUEST.—An eligible product de2 veloper may submit to the Secretary a 

3 written request for the eligible product de4 veloper to be authorized to obtain suffi5 cient quantities of an individual covered 

6 product subject to a REMS with ETASU. 

7 (ii) AUTHORIZATION.—Not later than 

8 90 days after the date on which a request 

9 under clause (i) is received, the Secretary 

10 shall, by written notice, authorize the eligi11 ble product developer to obtain sufficient 

12 quantities of an individual covered product 

13 subject to a REMS with ETASU for pur14 poses of— 

15 (I) development and testing that 

16 does not involve human clinical trials, 

17 if the eligible product developer has 

18 agreed to comply with any conditions 

19 the Secretary determines necessary; or 

20 (II) development and testing that 

21 involves human clinical trials, if the 

22 eligible product developer has— 

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1 rials for testing that include pro2 tections that provide safety pro3 tections comparable to those pro4 vided by the REMS for the cov5 ered product; or 

6 (BB) otherwise satisfied the 

7 Secretary that such protections 

8 will be provided; and 

9 (bb) met any other require10 ments the Secretary may estab11 lish. 

12 (iii) NOTICE.—A covered product au13 thorization issued under this subparagraph 

14 shall state that the provision of the covered 

15 product by the license holder under the 

16 terms of the authorization will not be a 

17 violation of the REMS for the covered 

18 product. 

19 (3) AFFIRMATIVE DEFENSE.—In a civil action 

20 brought under paragraph (1), it shall be an affirma21 tive defense, on which the defendant has the burden 

22 of persuasion by a preponderance of the evidence— 

23 (A) that, on the date on which the eligible 

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1 cient quantities of the covered product from the 

2 license holder— 

3 (i) neither the license holder nor any 

4 of its agents, wholesalers, or distributors 

5 was engaged in the manufacturing or com6 mercial marketing of the covered product; 

7 and 

8 (ii) neither the license holder nor any 

9 of its agents, wholesalers, or distributors 

10 otherwise had access to inventory of the 

11 covered product to supply to the eligible 

12 product developer on commercially reason13 able, market-based terms; or 

14 (B) that— 

15 (i) the license holder sells the covered 

16 product through agents, distributors, or 

17 wholesalers; 

18 (ii) the license holder has placed no 

19 restrictions, explicit or implicit, on its 

20 agents, distributors, or wholesalers to sell 

21 covered products to eligible product devel22 opers; and 

23 (iii) the covered product can be pur24 chased by the eligible product developer in 

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1 sonable, market-based terms from the 

2 agents, distributors, or wholesalers of the 

3 license holder. 

4 (4) REMEDIES.— 

5 (A) IN GENERAL.—If an eligible product 

6 developer prevails in a civil action brought 

7 under paragraph (1), the court shall— 

8 (i) order the license holder to provide 

9 to the eligible product developer without 

10 delay sufficient quantities of the covered 

11 product on commercially reasonable, mar12 ket-based terms; 

13 (ii) award to the eligible product de14 veloper reasonable attorney fees and costs 

15 of the civil action; and 

16 (iii) award to the eligible product de17 veloper a monetary amount sufficient to 

18 deter the license holder from failing to pro19 vide other eligible product developers with 

20 sufficient quantities of a covered product 

21 on commercially reasonable, market-based 

22 terms, if the court finds, by a preponder23 ance of the evidence— 

24 (I) that the license holder delayed 

25 providing sufficient quantities of the 


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1 covered product to the eligible product 

2 developer without a legitimate busi3 ness justification; or 

4 (II) that the license holder failed 

5 to comply with an order issued under 

6 clause (i). 

7 (B) MAXIMUM MONETARY AMOUNT.—A 

8 monetary amount awarded under subparagraph 

9 (A)(iii) shall not be greater than the revenue 

10 that the license holder earned on the covered 

11 product during the period— 

12 (i) beginning on— 

13 (I) for a covered product that is 

14 not subject to a REMS with ETASU, 

15 the date that is 31 days after the date 

16 on which the license holder received 

17 the request; or 

18 (II) for a covered product that is 

19 subject to a REMS with ETASU, the 

20 date that is 31 days after the later 

21 of— 

22 (aa) the date on which the 

23 license holder received the re24 quest; or 


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1 (bb) the date on which the 

2 license holder received a copy of 

3 the covered product authorization 

4 issued by the Secretary in ac5 cordance with paragraph (2)(B); 

6 and 

7 (ii) ending on the date on which the 

8 eligible product developer received suffi9 cient quantities of the covered product. 

10 (C) AVOIDANCE OF DELAY.—The court 

11 may issue an order under subparagraph (A)(i) 

12 before conducting further proceedings that may 

13 be necessary to determine whether the eligible 

14 product developer is entitled to an award under 

15 clause (ii) or (iii) of subparagraph (A), or the 

16 amount of any such award. 

17 (c) LIMITATION OF LIABILITY.—A license holder for 

18 a covered product shall not be liable for any claim arising 

19 out of the failure of an eligible product developer to follow 

20 adequate safeguards to assure safe use of the covered 

21 product during development or testing activities described 

22 in this section, including transportation, handling, use, or 

23 disposal of the covered product by the eligible product de24 veloper. 

25 (d) RULE OF CONSTRUCTION.— 


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1 (1) DEFINITION.—In this subsection, the term 

2 ‘‘antitrust laws’’— 

3 (A) has the meaning given the term in 

4 subsection (a) of the first section of the Clayton 

5 Act (15 U.S.C. 12); and 

6 (B) includes section 5 of the Federal 

7 Trade Commission Act (15 U.S.C. 45) to the 

8 extent that such section applies to unfair meth9 ods of competition. 

10 (2) ANTITRUST LAWS.—Nothing in this section 

11 shall be construed to limit the operation of any pro12 vision of the antitrust laws. 

13 SEC. 4. REMS APPROVAL PROCESS FOR SUBSEQUENT FIL14 ERS. 

15 Section 505–1 of the Federal Food, Drug, and Cos16 metic Act (21 U.S.C. 355–1) is amended— 

17 (1) in subsection (g)(4)(B)— 

18 (A) in clause (i) by striking ‘‘or’’ after the 

19 semicolon; 

20 (B) in clause (ii) by striking the period at 

21 the end and inserting ‘‘; or’’; and 

22 (C) by adding at the end the following: 

23 ‘‘(iii) accommodate different approved 

24 risk evaluation and mitigation strategies 

25 for a reference drug product and a drug 


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1 that is the subject of an abbreviated new 

2 drug application.’’; and 

3 (2) in subsection (i)(1), by striking subpara4 graph (B) and inserting the following: 

5 ‘‘(B) Elements to assure safe use, if re6 quired under subsection (f) for the listed drug. 

7 ‘‘(i) Subject to clause (ii), a drug that 

8 is the subject of an abbreviated new drug 

9 application may use— 

10 ‘‘(I) a single, shared system with 

11 the listed drug under subsection (f); 

12 or 

13 ‘‘(II) a different, comparable as14 pect of the elements to assure safe use 

15 under subsection (f). 

16 ‘‘(ii) The Secretary may require a 

17 drug that is the subject of an abbreviated 

18 new drug application and the listed drug to 

19 use a single, shared system under sub20 section (f), if the Secretary determines 

21 that no different, comparable aspect of the 

22 elements to assure safe use could satisfy 

23 the requirements of subsection (f).’’. 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Creating and Restoring 

3 Equal Access to Equivalent Samples Act of 2018’’ or the 

4 ‘‘CREATES Act of 2018’’. 

5 SEC. 2. FINDINGS. 

6 Congress finds the following: 

7 (1) It is the policy of the United States to pro8 mote competition in the market for drugs and biologi9 cal products by facilitating the timely entry of low10 cost generic and biosimilar versions of those drugs 

11 and biological products. 

12 (2) Since their enactment in 1984 and 2010, re13 spectively, the Drug Price Competition and Patent 

14 Term Restoration Act of 1984 (Public Law 98–417; 

15 98 Stat. 1585) and the Biologics Price Competition 

16 and Innovation Act of 2009 (subtitle A of title VII of 

17 Public Law 111–148; 124 Stat. 804), have provided 

18 pathways for making lower-cost versions of previously 

19 approved drugs and previously licensed biological 

20 products available to the people of the United States 

21 in a timely manner, thereby lowering overall pre22 scription drug costs for patients and taxpayers by bil23 lions of dollars each year. 

24 (3) In order for these pathways to function as 

25 intended, developers of generic drugs and biosimilar 

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1 neric product developers’’) must be able to obtain 

2 quantities of the reference listed drug or biological 

3 product with which the generic drug or biosimilar bi4 ological product is intended to compete (referred to in 

5 this section as a ‘‘covered product’’) for purposes of 

6 supporting an application for approval by the Food 

7 and Drug Administration, including for testing to 

8 show that— 

9 (A) a prospective generic drug is bioequiva10 lent to the covered product in accordance with 

11 subsection (j) of section 505 of the Federal, Food, 

12 Drug, and Cosmetic Act (21 U.S.C. 355), or 

13 meets the requirements for approval of an appli14 cation submitted under subsection (b)(2) of that 

15 section; or 

16 (B) a prospective biosimilar biological prod17 uct is biosimilar to or interchangeable with its 

18 reference biological product under section 351(k) 

19 of the Public Health Service Act (42 U.S.C. 

20 262(k)), as applicable. 

21 (4) For drugs and biological products that are 

22 subject to a risk evaluation and mitigation strategy, 

23 another essential component in the creation of low24 cost generic and biosimilar versions of covered prod25 ucts is the ability of generic product developers to join 


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1 the manufacturer of the covered product (referred to 

2 in this section as the ‘‘license holder’’) in a single, 

3 shared system of elements to assure safe use and sup4 porting agreements as required by section 505–1 of 

5 the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

6 355–1), or secure a variance therefrom. 

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 ob13 taining quantities of the covered product necessary for 

14 the generic product developer to support an applica15 tion for approval by the Food and Drug Administra16 tion, including testing to show bioequivalence, bio17 similarity, or interchangeability to the covered prod18 uct, in some instances based on the justification that 

19 the covered product is subject to a risk evaluation and 

20 mitigation strategy with elements to assure safe use 

21 under section 505–1 of the Federal Food, Drug, and 

22 Cosmetic Act (21 U.S.C. 355–1). 

23 (6) The Director of the Center for Drug Evalua24 tion and Research at the Food and Drug Administra25 tion has testified that some manufacturers of covered 


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1 products have used risk evaluation and mitigation 

2 strategies and distribution restrictions adopted by the 

3 manufacturer on their own behalf as reasons to not 

4 sell quantities of a covered product to generic product 

5 developers, causing barriers and delays in getting ge6 neric products on the market. The Food and Drug 

7 Administration has reported receiving significant 

8 numbers of inquiries from generic product developers 

9 who were unable to obtain samples of covered prod10 ucts to conduct necessary testing and otherwise meet 

11 requirements for approval of generic drugs. 

12 (7) The Acting Chairman of the Federal Trade 

13 Commission has testified that the Federal Trade Com14 mission continues to be very concerned about poten15 tial abuses by manufacturers of brand drugs of risk 

16 evaluation and mitigation strategies or other closed 

17 distribution systems to impede generic competition. 

18 (8) Also contrary to the policy of the United 

19 States to promote competition in the market for drugs 

20 and biological products by facilitating the timely 

21 entry of lower-cost generic and biosimilar versions of 

22 those drugs and biological products, certain license 

23 holders are impeding the prompt negotiation and de24 velopment on commercially reasonable terms of a sin25 gle, shared system of elements to assure safe use, 


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1 which may be necessary for the generic product devel2 oper to gain approval for its drug or licensing for its 

3 biological product. 

4 (9) While the antitrust laws may address the re5 fusal by some license holders to provide quantities of 

6 a covered product to a generic product developer, a 

7 more tailored legal pathway would help ensure that 

8 generic product developers can obtain necessary quan9 tities of a covered product in a timely way for pur10 poses of developing a generic drug or biosimilar bio11 logical product, facilitating competition in the mar12 ketplace for drugs and biological products. 

13 (10) The antitrust laws may address actions by 

14 license holders who impede the prompt negotiation 

15 and development of a single, shared system of ele16 ments to assure safe use, and the Food and Drug Ad17 ministration has some authority to waive the require18 ment of a single, shared system. Clearer regulatory 

19 authority to approve different systems that meet the 

20 statutory requirements to ensure patient safety, how21 ever, would limit the effectiveness of bad faith negotia22 tions over single, shared systems to delay generic ap23 proval. At the same time, clearer regulatory authority 

24 would ensure all systems protect patient safety. 


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1 SEC. 3. ACTIONS FOR DELAYS OF GENERIC DRUGS AND BIO2 SIMILAR BIOLOGICAL PRODUCTS. 

3 (a) DEFINITIONS.—In this section— 

4 (1) the term ‘‘commercially reasonable, market5 based terms’’ means— 

6 (A) a non-discriminatory price for the sale 

7 of the covered product at or below, but not great8 er than, the most recent wholesale acquisition 

9 cost for the drug, as defined in section 

10 1847A(c)(6)(B) of the Social Security Act (42 

11 U.S.C. 1395w–3a(c)(6)(B)); 

12 (B) a schedule for delivery that results in 

13 the transfer of the covered product to the eligible 

14 product developer consistent with the timing 

15 under subsection (b)(2)(A)(iv); and 

16 (C) no additional conditions are imposed 

17 on the sale of the covered product; 

18 (2) the term ‘‘covered product’’— 

19 (A) means— 

20 (i) any drug approved under sub21 section (b) or (j) of section 505 of the Fed22 eral Food, Drug, and Cosmetic Act (21 

23 U.S.C. 355) or biological product licensed 

24 under subsection (a) or (k) of section 351 of 

25 the Public Health Service Act (42 U.S.C. 

26 262); 


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1 (ii) any combination of a drug or bio2 logical product described in clause (i); or 

3 (iii) when reasonably necessary to sup4 port approval of an application under sec5 tion 505 of the Federal Food, Drug, and 

6 Cosmetic Act (21 U.S.C. 355), or section 

7 351 of the Public Health Service Act (42 

8 U.S.C. 262), as applicable, or otherwise 

9 meet the requirements for approval under 

10 either such section, any product, including 

11 any device, that is marketed or intended for 

12 use with such a drug or biological product; 

13 and 

14 (B) does not include any drug or biological 

15 product that appears on the drug shortage list in 

16 effect under section 506E of the Federal Food, 

17 Drug, and Cosmetic Act (21 U.S.C. 356e), unless 

18 the shortage will not be promptly resolved— 

19 (i) as demonstrated by the fact that the 

20 drug or biological product has been in 

21 shortage for more than 6 months; or 

22 (ii) as otherwise determined by the 

23 Secretary; 


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1 (3) the term ‘‘device’’ has the meaning given the 

2 term in section 201 of the Federal Food, Drug, and 

3 Cosmetic Act (21 U.S.C. 321); 

4 (4) the term ‘‘eligible product developer’’ means 

5 a person that seeks to develop a product for approval 

6 pursuant to an application for approval under sub7 section (b)(2) or (j) of section 505 of the Federal 

8 Food, Drug, and Cosmetic Act (21 U.S.C. 355) or for 

9 licensing pursuant to an application under section 

10 351(k) of the Public Health Service Act (42 U.S.C. 

11 262(k)); 

12 (5) the term ‘‘license holder’’ means the holder of 

13 an application approved under subsection (c) or (j) of 

14 section 505 of the Federal Food, Drug, and Cosmetic 

15 Act (21 U.S.C. 355) or the holder of a license under 

16 subsection (a) or (k) of section 351 of the Public 

17 Health Service Act (42 U.S.C. 262) for a covered 

18 product; 

19 (6) the term ‘‘REMS’’ means a risk evaluation 

20 and mitigation strategy under section 505–1 of the 

21 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

22 355–1); 

23 (7) the term ‘‘REMS with ETASU’’ means a 

24 REMS that contains elements to assure safe use under 


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1 section 505–1(f) of the Federal Food, Drug, and Cos2 metic Act (21 U.S.C. 355–1(f)); 

3 (8) the term ‘‘Secretary’’ means the Secretary of 

4 Health and Human Services; 

5 (9) the term ‘‘single, shared system of elements to 

6 assure safe use’’ means a single, shared system of ele7 ments to assure safe use under section 505–1(f) of the 

8 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

9 355–1(f)); and 

10 (10) the term ‘‘sufficient quantities’’ means an 

11 amount of a covered product that allows the eligible 

12 product developer to— 

13 (A) conduct testing to support an applica14 tion— 

15 (i) for approval under subsection (b)(2) 

16 or (j) of section 505 of the Federal Food, 

17 Drug, and Cosmetic Act (21 U.S.C. 355); or 

18 (ii) for licensing under section 351(k) 

19 of the Public Health Service Act (42 U.S.C. 

20 262(k)); and 

21 (B) fulfill any regulatory requirements re22 lating to such an application for approval or li23 censing. 

24 (b) CIVIL ACTION FOR FAILURE TO PROVIDE SUFFI25 CIENT QUANTITIES OF A COVERED PRODUCT.— 


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1 (1) IN GENERAL.—An eligible product developer 

2 may bring a civil action against the license holder for 

3 a covered product seeking relief under this subsection 

4 in an appropriate district court of the United States 

5 alleging that the license holder has declined to provide 

6 sufficient quantities of the covered product to the eli7 gible product developer on commercially reasonable, 

8 market-based terms. 

9 (2) ELEMENTS.— 

10 (A) IN GENERAL.—To prevail in a civil ac11 tion brought under paragraph (1), an eligible 

12 product developer shall prove, by a preponder13 ance of the evidence— 

14 (i) that— 

15 (I) the covered product is not sub16 ject to a REMS with ETASU; or 

17 (II) if the covered product is sub18 ject to a REMS with ETASU— 

19 (aa) the eligible product de20 veloper has obtained a covered 

21 product authorization from the 

22 Secretary in accordance with sub23 paragraph (B); and 

24 (bb) the eligible product de25 veloper has provided a copy of the 


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1 covered product authorization to 

2 the license holder; 

3 (ii) that, as of the date on which the 

4 civil action is filed, the product developer 

5 has not obtained sufficient quantities of the 

6 covered product on commercially reasonable, 

7 market-based terms; 

8 (iii) that the eligible product developer 

9 has requested to purchase sufficient quan10 tities of the covered product from the license 

11 holder; and 

12 (iv) that the license holder has not de13 livered to the eligible product developer suf14 ficient quantities of the covered product on 

15 commercially reasonable, market-based 

16 terms— 

17 (I) for a covered product that is 

18 not subject to a REMS with ETASU, 

19 by the date that is 31 days after the 

20 date on which the license holder re21 ceived the request for the covered prod22 uct; and 

23 (II) for a covered product that is 

24 subject to a REMS with ETASU, by 

25 31 days after the later of— 


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1 (aa) the date on which the li2 cense holder received the request 

3 for the covered product; or 

4 (bb) the date on which the li5 cense holder received a copy of the 

6 covered product authorization 

7 issued by the Secretary in accord8 ance with subparagraph (B). 

9 (B) AUTHORIZATION FOR COVERED PROD10 UCT SUBJECT TO A REMS WITH ETASU.— 

11 (i) REQUEST.—An eligible product de12 veloper may submit to the Secretary a writ13 ten request for the eligible product developer 

14 to be authorized to obtain sufficient quan15 tities of an individual covered product sub16 ject to a REMS with ETASU. 

17 (ii) AUTHORIZATION.—Not later than 

18 120 days after the date on which a request 

19 under clause (i) is received, the Secretary 

20 shall, by written notice, authorize the eligi21 ble product developer to obtain sufficient 

22 quantities of an individual covered product 

23 subject to a REMS with ETASU for pur24 poses of— 


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1 (I) development and testing that 

2 does not involve human clinical trials, 

3 if the eligible product developer has 

4 agreed to comply with any conditions 

5 the Secretary determines necessary; or 

6 (II) development and testing that 

7 involves human clinical trials, if the 

8 eligible product developer has— 

9 (aa)(AA) submitted protocols, 

10 informed consent documents, and 

11 informational materials for test12 ing that include protections that 

13 provide safety protections com14 parable to those provided by the 

15 REMS for the covered product; or 

16 (BB) otherwise satisfied the 

17 Secretary that such protections 

18 will be provided; and 

19 (bb) met any other require20 ments the Secretary may estab21 lish. 

22 (iii) NOTICE.—A covered product au23 thorization issued under this subparagraph 

24 shall state that the provision of the covered 

25 product by the license holder under the 


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1 terms of the authorization will not be a vio2 lation of the REMS for the covered product. 

3 (3) AFFIRMATIVE DEFENSE.—In a civil action 

4 brought under paragraph (1), it shall be an affirma5 tive defense, on which the defendant has the burden 

6 of persuasion by a preponderance of the evidence— 

7 (A) that, on the date on which the eligible 

8 product developer requested to purchase sufficient 

9 quantities of the covered product from the license 

10 holder— 

11 (i) neither the license holder nor any of 

12 its agents, wholesalers, or distributors was 

13 engaged in the manufacturing or commer14 cial marketing of the covered product; and 

15 (ii) neither the license holder nor any 

16 of its agents, wholesalers, or distributors 

17 otherwise had access to inventory of the cov18 ered product to supply to the eligible prod19 uct developer on commercially reasonable, 

20 market-based terms; or 

21 (B) that— 

22 (i) the license holder sells the covered 

23 product through agents, distributors, or 

24 wholesalers; 


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1 (ii) the license holder has placed no re2 strictions, explicit or implicit, on its agents, 

3 distributors, or wholesalers to sell covered 

4 products to eligible product developers; and 

5 (iii) the covered product can be pur6 chased by the eligible product developer in 

7 sufficient quantities on commercially rea8 sonable, market-based terms from the 

9 agents, distributors, or wholesalers of the li10 cense holder. 

11 (4) REMEDIES.— 

12 (A) IN GENERAL.—If an eligible product de13 veloper prevails in a civil action brought under 

14 paragraph (1), the court shall— 

15 (i) order the license holder to provide 

16 to the eligible product developer without 

17 delay sufficient quantities of the covered 

18 product on commercially reasonable, mar19 ket-based terms; 

20 (ii) award to the eligible product devel21 oper reasonable attorney’s fees and costs of 

22 the civil action; and 

23 (iii) award to the eligible product de24 veloper a monetary amount sufficient to 

25 deter the license holder from failing to proVerDate Sep 11 2014 22:36 Jun 21, 2018 Jkt 079200 PO 00000 Frm 00035 Fmt 6652 Sfmt 6203 E:\BILLS\S974.RS S974

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1 vide other eligible product developers with 

2 sufficient quantities of a covered product on 

3 commercially reasonable, market-based 

4 terms, if the court finds, by a preponder5 ance of the evidence— 

6 (I) that the license holder delayed 

7 providing sufficient quantities of the 

8 covered product to the eligible product 

9 developer without a legitimate business 

10 justification; or 

11 (II) that the license holder failed 

12 to comply with an order issued under 

13 clause (i). 

14 (B) MAXIMUM MONETARY AMOUNT.—A 

15 monetary amount awarded under subparagraph 

16 (A)(iii) shall not be greater than the revenue that 

17 the license holder earned on the covered product 

18 during the period— 

19 (i) beginning on— 

20 (I) for a covered product that is 

21 not subject to a REMS with ETASU, 

22 the date that is 31 days after the date 

23 on which the license holder received the 

24 request; or 


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1 (II) for a covered product that is 

2 subject to a REMS with ETASU, the 

3 date that is 31 days after the later of— 

4 (aa) the date on which the li5 cense holder received the request; 

6 or 

7 (bb) the date on which the li8 cense holder received a copy of the 

9 covered product authorization 

10 issued by the Secretary in accord11 ance with paragraph (2)(B); and 

12 (ii) ending on the date on which the el13 igible product developer received sufficient 

14 quantities of the covered product. 

15 (C) AVOIDANCE OF DELAY.—The court may 

16 issue an order under subparagraph (A)(i) before 

17 conducting further proceedings that may be nec18 essary to determine whether the eligible product 

19 developer is entitled to an award under clause 

20 (ii) or (iii) of subparagraph (A), or the amount 

21 of any such award. 

22 (c) LIMITATION OF LIABILITY.—A license holder for a 

23 covered product shall not be liable for any claim under Fed24 eral, State, or local law arising out of the failure of an 

25 eligible product developer to follow adequate safeguards to 


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1 assure safe use of the covered product during development 

2 or testing activities described in this section, including 

3 transportation, handling, use, or disposal of the covered 

4 product by the eligible product developer. 

5 (d) NO VIOLATION OF REMS.—The provision of sam6 ples of a drug pursuant to an authorization under sub7 section (b)(2)(B) shall not be considered a violation of the 

8 requirements of any risk evaluation and mitigation strat9 egy that may be in place under section 505–1 of the Federal 

10 Food, Drug, and Cosmetic Act (21 U.S.C. 355–1) for such 

11 drug. 

12 (e) RULE OF CONSTRUCTION.— 

13 (1) DEFINITION.—In this subsection, the term 

14 ‘‘antitrust laws’’— 

15 (A) has the meaning given the term in sub16 section (a) of the first section of the Clayton Act 

17 (15 U.S.C. 12); and 

18 (B) includes section 5 of the Federal Trade 

19 Commission Act (15 U.S.C. 45) to the extent that 

20 such section applies to unfair methods of com21 petition. 

22 (2) ANTITRUST LAWS.—Nothing in this section 

23 shall be construed to limit the operation of any provi24 sion of the antitrust laws. 


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1 SEC. 4. REMS APPROVAL PROCESS FOR SUBSEQUENT FIL2 ERS. 

3 Section 505–1 of the Federal Food, Drug, and Cos4 metic Act (21 U.S.C. 355–1) is amended— 

5 (1) in subsection (g)(4)(B)— 

6 (A) in clause (i) by striking ‘‘or’’ after the 

7 semicolon; 

8 (B) in clause (ii) by striking the period at 

9 the end and inserting ‘‘; or’’; and 

10 (C) by adding at the end the following: 

11 ‘‘(iii) accommodate different, com12 parable approved risk evaluation and miti13 gation strategies for a drug that is the sub14 ject of an application under section 505(j), 

15 and the applicable listed drug.’’; 

16 (2) in subsection (i)(1), by striking subpara17 graph (B) and inserting the following: 

18 ‘‘(B)(i) Elements to assure safe use, if re19 quired under subsection (f) for the listed drug, 

20 which, subject to clause (ii), for a drug that is 

21 the subject of an application under section 505(j) 

22 may use— 

23 ‘‘(I) a single, shared system with the 

24 listed drug under subsection (f); or 


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1 ‘‘(II) a different, comparable aspect of 

2 the elements to assure safe use under sub3 section (f). 

4 ‘‘(ii) The Secretary may require a drug that 

5 is the subject of an application under section 

6 505(j) and the listed drug to use a single, shared 

7 system under subsection (f), if the Secretary de8 termines that no different, comparable aspect of 

9 the elements to assure safe use could satisfy the 

10 requirements of subsection (f).’’; and 

11 (3) by adding at the end the following: 

12 ‘‘(l) SEPARATE REMS.—When used in this section, the 

13 terms ‘‘different, comparable aspect of the elements to assure 

14 safe use’’ or ‘‘different, comparable approved risk evaluation 

15 and mitigation strategies’’ means a risk evaluation and 

16 mitigation strategy for a drug that is the subject of an ap17 plication under section 505(j) that uses different methods 

18 or operational means than the strategy required under sub19 section (a) for the applicable listed drug, or other applica20 tion under section 505(j) with the same such listed drug, 

21 but achieves the same level of safety as such strategy.’’. 


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Calendar No. 482 

115TH CONGRESS 

2D SESSION S. 974 

A BILL 

To promote competition in the market for drugs 

versions of those drugs and biological products. entry of lower-cost generic and biosimilar and biological products by facilitating the timely 

JUNE 21, 2018 

Reported with an amendment 


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