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H.R. 965: CREATES Act of 2019

The text of the bill below is as of May 10, 2019 (Reported by House Committee).


IB

Union Calendar No. 33

116th CONGRESS

1st Session

H. R. 965

[Report No. 116–55, Parts I and II]

IN THE HOUSE OF REPRESENTATIVES

February 5, 2019

(for himself, Mr. Sensenbrenner, Mr. Nadler, Mr. Collins of Georgia, Mr. Welch, and Mr. McKinley) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

May 10, 2019

Additional sponsors: Mr. Meadows, Ms. Finkenauer, Mr. Doggett, Mr. Cole, Mr. Gallagher, Mr. Lipinski, Mr. Rush, Ms. McCollum, Mr. Pallone, Mr. Perry, Mr. Ruiz, Mrs. Dingell, Ms. Eshoo, Ms. Matsui, Mrs. Craig, Mr. Tonko, Mr. Gohmert, Mr. Van Drew, Ms. Clarke of New York, Mr. Courtney, Mr. Allred, Ms. Schakowsky, Mr. Crow, Mr. Gonzalez of Ohio, Mr. Larson of Connecticut, Mr. McAdams, Mr. Schrader, Mr. Rodney Davis of Illinois, Mr. Pappas, Mr. Kennedy, Ms. Davids of Kansas, Mr. Norcross, Ms. Spanberger, Mr. Quigley, Mr. 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.


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.

2.

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 nondiscriminatory 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—

(i)

the drug or biological product has been on the drug shortage list in effect under such section 506E continuously for more than 6 months; or

(ii)

the Secretary determines that inclusion of the drug or biological product as a covered product is likely to contribute to alleviating or preventing a shortage.

(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 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. 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;

(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; or

(C)

that the license holder made an offer to sell sufficient quantities of the covered product to the eligible product developer at commercially reasonable market-based terms—

(i)

for a covered product that is not subject to a REMS with ETASU, by the date that is 14 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 7 days after the date on which the eligible 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;

(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 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

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

.

(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.

3.

REMS approval process for subsequent filers

Section 505–1 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 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;

(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 aspects of the elements to assure safe use 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).

;

(3)

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

(3)

Shared REMS

If the Secretary approves, in accordance with paragraph (1)(C)(i)(II), a different, comparable aspect of the elements to assure safe use under subsection (f) for a drug that is the subject of an abbreviated new drug application under section 505(j), the Secretary may require that such different comparable aspect of the elements to assure safe use can be used with respect to any other drug that is the subject of an application under section 505(j) or 505(b) that references the same listed drug.

; 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.

.

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).

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