Title: 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.
Policy area: Health

Summary:
Creating and Restoring Equal Access to Equivalent Samples Act of 2019 or the CREATES Act of 2019
This bill generally allows the developer of a drug or biological product, such as a generic or biosimilar version of a drug, to bring a civil action against the license holder of an approved medication if the holder refuses to make available sufficient quantities of the approved medication for the developer's testing. The bill also establishes affirmative defenses to such a civil action.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 340 Placed on Calendar Senate (PCS)]

<DOC>





                                                        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. Durbin, 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) introduced 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 biological 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 Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Creating and Restoring Equal Access 
to Equivalent Samples Act of 2019'' or the ``CREATES Act of 2019''.

SEC. 2. 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 
        1984 (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. ACTIONS FOR DELAYS OF GENERIC DRUGS AND BIOSIMILAR BIOLOGICAL 
              PRODUCTS.

    (a) Definitions.--In this section--
            (1) the term ``commercially reasonable, market-based 
        terms'' means--
                    (A) a non-discriminatory price for the sale of the 
                covered product at or below, but not greater than, the 
                most recent wholesale acquisition cost for the drug, as 
                defined in section 1847A(c)(6)(B) of the Social 
                Security Act (42 U.S.C. 1395w-3a(c)(6)(B));
                    (B) a schedule for delivery that results in the 
                transfer of the covered product to the eligible product 
                developer consistent with the timing under subsection 
                (b)(2)(A)(iv); and
                    (C) no additional conditions are imposed on the 
                sale of the covered product;
            (2) the term ``covered product''--
                    (A) means--
                            (i) any drug approved under subsection (c) 
                        or (j) of section 505 of the Federal Food, 
                        Drug, and Cosmetic Act (21 U.S.C. 355) or 
                        biological product licensed under subsection 
                        (a) or (k) of section 351 of the Public Health 
                        Service Act (42 U.S.C. 262);
                            (ii) any combination of a drug or 
                        biological product described in clause (i); or
                            (iii) when reasonably necessary to support 
                        approval of an application under section 505 of 
                        the Federal Food, Drug, and Cosmetic Act (21 
                        U.S.C. 355), or section 351 of the Public 
                        Health Service Act (42 U.S.C. 262), as 
                        applicable, or otherwise meet the requirements 
                        for approval under either such section, any 
                        product, including any device, that is marketed 
                        or intended for use with such a drug or 
                        biological product; and
                    (B) does not include any drug or biological product 
                that appears on the drug shortage list in effect under 
                section 506E of the Federal Food, Drug, and Cosmetic 
                Act (21 U.S.C. 356e), unless the shortage will not be 
                promptly resolved--
                            (i) as demonstrated by the fact that the 
                        drug or biological product has been in shortage 
                        for more than 6 months; or
                            (ii) as otherwise determined by the 
                        Secretary;
            (3) the term ``device'' has the meaning given the term in 
        section 201 of the Federal Food, Drug, and Cosmetic Act (21 
        U.S.C. 321);
            (4) the term ``eligible product developer'' means a person 
        that seeks to develop a product for approval pursuant to an 
        application for approval under subsection (b)(2) or (j) of 
        section 505 of the Federal Food, Drug, and Cosmetic Act (21 
        U.S.C. 355) or for licensing pursuant to an application under 
        section 351(k) of the Public Health Service Act (42 U.S.C. 
        262(k));
            (5) the term ``license holder'' means the holder of an 
        application approved under subsection (c) or (j) of section 505 
        of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) or 
        the holder of a license under subsection (a) or (k) of section 
        351 of the Public Health Service Act (42 U.S.C. 262) for a 
        covered product;
            (6) the term ``REMS'' means a risk evaluation and 
        mitigation strategy under section 505-1 of the Federal Food, 
        Drug, and Cosmetic Act (21 U.S.C. 355-1);
            (7) the term ``REMS with ETASU'' means a REMS that contains 
        elements to assure safe use under section 505-1(f) of the 
        Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355-1(f));
            (8) the term ``Secretary'' means the Secretary of Health 
        and Human Services;
            (9) the term ``single, shared system of elements to assure 
        safe use'' means a single, shared system of elements to assure 
        safe use under section 505-1(f) of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 355-1(f)); and
            (10) the term ``sufficient quantities'' means an amount of 
        a covered product that allows the eligible product developer 
        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. 355); or
                            (ii) section 351(k) of the Public Health 
                        Service Act (42 U.S.C. 262(k)); and
                    (B) fulfill any regulatory requirements relating to 
                approval of such an application.
    (b) Civil Action for Failure To Provide Sufficient Quantities of a 
Covered Product.--
            (1) In general.--An eligible product developer may bring a 
        civil action against the license holder for a covered product 
        seeking relief under this subsection in an appropriate district 
        court of the United States alleging that the license holder has 
        declined to provide sufficient quantities of the covered 
        product to the eligible product developer on commercially 
        reasonable, market-based terms.
            (2) Elements.--
                    (A) In general.--To prevail in a civil action 
                brought under paragraph (1), an eligible product 
                developer shall prove, by a preponderance of the 
                evidence--
                            (i) that--
                                    (I) the covered product is not 
                                subject to a REMS with ETASU; or
                                    (II) if the covered product is 
                                subject to a REMS with ETASU--
                                            (aa) the eligible product 
                                        developer has obtained a 
                                        covered product authorization 
                                        from the Secretary in 
                                        accordance with subparagraph 
                                        (B); and
                                            (bb) the eligible product 
                                        developer has provided a copy 
                                        of the covered product 
                                        authorization to the license 
                                        holder;
                            (ii) that, as of the date on which the 
                        civil action is filed, the product developer 
                        has not obtained sufficient quantities of the 
                        covered product on commercially reasonable, 
                        market-based terms;
                            (iii) that the eligible product developer 
                        has requested to purchase sufficient quantities 
                        of the covered product from the license holder; 
                        and
                            (iv) that the license holder has not 
                        delivered to the eligible product developer 
                        sufficient quantities of the covered product on 
                        commercially reasonable, market-based terms--
                                    (I) for a covered product that is 
                                not subject to a REMS with ETASU, by 
                                the date that is 31 days after the date 
                                on which the license holder received 
                                the request for the covered product; 
                                and
                                    (II) for a covered product that is 
                                subject to a REMS with ETASU, by 31 
                                days after the later of--
                                            (aa) the date on which the 
                                        license holder received the 
                                        request for the covered 
                                        product; or
                                            (bb) the date on which the 
                                        license holder received a copy 
                                        of the covered product 
                                        authorization issued by the 
                                        Secretary in accordance with 
                                        subparagraph (B).
                    (B) Authorization for covered product subject to a 
                rems with etasu.--
                            (i) Request.--An eligible product developer 
                        may submit to the Secretary a written request 
                        for the eligible product developer to be 
                        authorized to obtain sufficient quantities of 
                        an individual covered product subject to a REMS 
                        with ETASU.
                            (ii) Authorization.--Not later than 120 
                        days after the date on which a request under 
                        clause (i) is received, the Secretary shall, by 
                        written notice, authorize the eligible product 
                        developer to obtain sufficient quantities of an 
                        individual covered product subject to a REMS 
                        with ETASU for purposes of--
                                    (I) development and testing that 
                                does not involve human clinical trials, 
                                if the eligible product developer has 
                                agreed to comply with any conditions 
                                the Secretary determines necessary; or
                                    (II) development and testing that 
                                involves human clinical trials, if the 
                                eligible product developer has--
                                            (aa)(AA) submitted 
                                        protocols, informed consent 
                                        documents, and informational 
                                        materials for testing that 
                                        include protections that 
                                        provide safety protections 
                                        comparable to those provided by 
                                        the REMS for the covered 
                                        product; or
                                            (BB) otherwise satisfied 
                                        the Secretary that such 
                                        protections will be provided; 
                                        and
                                            (bb) met any other 
                                        requirements the Secretary may 
                                        establish.
                            (iii) Notice.--A covered product 
                        authorization issued under this subparagraph 
                        shall state that the provision of the covered 
                        product by the license holder under the terms 
                        of the authorization will not be a violation of 
                        the REMS for the covered product.
            (3) Affirmative defense.--In a civil action brought under 
        paragraph (1), it shall be an affirmative defense, on which the 
        defendant has the burden of persuasion by a preponderance of 
        the evidence--
                    (A) that, on the date on which the eligible product 
                developer requested to purchase sufficient quantities 
                of the covered product from the license holder--
                            (i) neither the license holder nor any of 
                        its agents, wholesalers, or distributors was 
                        engaged in the manufacturing or commercial 
                        marketing of the covered product; and
                            (ii) neither the license holder nor any of 
                        its agents, wholesalers, or distributors 
                        otherwise had access to inventory of the 
                        covered product to supply to the eligible 
                        product developer on commercially reasonable, 
                        market-based terms; or
                    (B) that--
                            (i) the license holder sells the covered 
                        product through agents, distributors, or 
                        wholesalers;
                            (ii) the license holder has placed no 
                        restrictions, explicit or implicit, on its 
                        agents, distributors, or wholesalers to sell 
                        covered products to eligible product 
                        developers; 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.
            (4) 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's 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).
                    (B) Maximum monetary amount.--A monetary amount 
                awarded under subparagraph (A)(iii) shall not be 
                greater than the revenue that the license holder earned 
                on the covered product during the period--
                            (i) beginning on--
                                    (I) for a covered product that is 
                                not subject to a REMS with ETASU, the 
                                date that is 31 days after the date on 
                                which the license holder received the 
                                request; or
                                    (II) for a covered product that is 
                                subject to a REMS with ETASU, the date 
                                that is 31 days after the later of--
                                            (aa) the date on which the 
                                        license holder received the 
                                        request; or
                                            (bb) the date on which the 
                                        license holder received a copy 
                                        of the covered product 
                                        authorization issued by the 
                                        Secretary in accordance with 
                                        paragraph (2)(B); and
                            (ii) ending on the date on which the 
                        eligible product developer received sufficient 
                        quantities of the covered product.
                    (C) Avoidance of delay.--The court may issue an 
                order under subparagraph (A)(i) before conducting 
                further proceedings that may be necessary to determine 
                whether the eligible product developer is entitled to 
                an award under clause (ii) or (iii) of subparagraph 
                (A), or the amount of any such award.
    (c) Limitation of Liability.--A license holder for a covered 
product shall not be liable for any claim under Federal, State, or 
local law 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.
    (d) No Violation of REMS.--The 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) for such drug.
    (e) Rule of Construction.--
            (1) Definition.--In this subsection, the term ``antitrust 
        laws''--
                    (A) has the meaning given the term in subsection 
                (a) of the first section of the Clayton Act (15 U.S.C. 
                12); and
                    (B) includes section 5 of the Federal Trade 
                Commission Act (15 U.S.C. 45) to the extent that such 
                section applies to unfair methods of competition.
            (2) Antitrust laws.--Nothing in this section shall be 
        construed to limit the operation of any provision of the 
        antitrust laws.

SEC. 4. REMS APPROVAL PROCESS FOR SUBSEQUENT FILERS.

    Section 505-1 of the Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 355-1) is amended--
            (1) in subsection (g)(4)(B)--
                    (A) in clause (i) by striking ``or'' after the 
                semicolon;
                    (B) in clause (ii) by striking the period at the 
                end and inserting ``; or''; and
                    (C) by adding at the end the following:
                            ``(iii) accommodate different, comparable 
                        approved risk evaluation and mitigation 
                        strategies for a drug that is the subject of an 
                        application under section 505(j), and the 
                        applicable listed drug.'';
            (2) in subsection (i)(1), by striking subparagraph (C) and 
        inserting the following:
                    ``(C)(i) Elements to assure safe use, if required 
                under subsection (f) for the listed drug, which, 
                subject to clause (ii), for a drug that is the subject 
                of an application under section 505(j) 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 application under section 505(j) 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).''; and
            (3) by adding at the end the following:
    ``(l) 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.''.
                                                        Calendar No. 22

116th CONGRESS

  1st Session

                                 S. 340

_______________________________________________________________________

                                 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.

_______________________________________________________________________

                            February 6, 2019

            Read the second time and placed on the calendar