by Darrell Taylor and Kristopher Chandler
In furtherance of the government’s efforts to bring down healthcare costs, Senators Patrick Leahy (D-VT.), Chuck Grassley (R-IA), Amy Klobuchar (D-MN), and Mike Lee (R-UT) have introduced the Creating and Restoring Equal Access to Equivalent Samples (“CREATES”) Act. The CREATES Act is intended to give low priced, generic alternatives to brand-name drugs an easier path into the marketplace.
The CREATES Act is designed to facilitate access to samples of branded pharmaceuticals and the related safety protocols. Currently, generic manufactures must prove that their low-cost alternative is as safe and effective as its brand-name competitor. Access to the samples of the brand-name drug are needed in order to make the necessary comparisons. Pharmaceutical companies with branded products are reticent to provide samples of the brand-name drug to generic companies. Without samples, generic manufacturers are limited in their ability to do the comparisons needed to fast track FDA approval to bring their lower-cost alternatives to market as soon as possible.
Pharmaceutical companies, in addition to limiting access to their proprietary samples, also restrict generic manufacturers’ access to shared safety protocols for distribution of drugs. To gain FDA approval for certain types of drugs, generic manufacturers are required to join brand-name competitors in a shared Risk Evaluation Mitigation Strategy with Elements to Assure Safe Use (“REMS”) distribution safety protocol. Pharmaceutical companies often refuse to negotiate a shared safety protocol with generic manufacturers because they would be undermining their market share, which likely would have a negative impact on their business.
As drafted, the CREATES Act allows generic manufacturers to seek injunctive relief from federal courts against both these practices. The CREATES Act allows generic manufacturers to obtain a court order compelling the pharmaceutical company to supply samples of brand-name drugs for comparison testing. The CREATES Act also allows generic manufacturers to seek a court order compelling a brand-name manufacturer to enter into a shared REMS with the generic manufacturer or demonstrate that the FDA has waived the requirement to be a part of a shared REMS. Finally, the CREATES Act allows a generic manufacturer to seek an award for damages from a federal court against a brand-name pharmaceutical that will not provide samples or access to shared REMS.
The CREATES Act is supported by the American Hospital Association, the Generic Pharmaceutical Association, and many other advocacy groups that are trying to lower the costs to obtain prescription drugs. With the heighten scrutiny over drug pricing, it will be interesting to see where the CREATES Act goes from here. The entire text of the introduced bill can be found here.
Please contact a member of the Benesch Health Care & Life Sciences team if you have any questions about how the CREATES Act may impact your business.
Darrel Taylor is a partner in Benesch’s Health Care & Life Sciences group. Kristopher Chandler is a law clerk at Benesch.