5 Things to Know About the CREATES Act

On June 14, 2018, the Senate Judiciary Committee voted 16 to 5 to report the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act, which promotes price competition to lower costs of drugs, to the Senate floor.

Here are 5 key things to know about the proposed legislation.

1. The CREATES Act seeks to end “shenanigans” that delay competition from generic and biosimilar drugs.

Under the CREATES Act, a drug company can bring a civil action against an innovator drug company if the latter refuses to make available enough samples of a product for testing so that a biosimilar or generic can be developed. It also allows the FDA to approve alternative Risk Evaluation and Mitigation Strategy (REMS) programs if a generic or biosimilar developer and the innovator company are unable to arrive at a single shared system.

REMS Programs are designed to protect patient safety by restricting access to drugs that have special safety concerns and by requiring activities like provider training and patient counseling. However, abuse of REMS programs can halt generics and biosimilar development by keeping samples out of the hands of competitors. During a public workshop on drug pricing competition in November 2017, FDA Commissioner, Scott Gottlieb, MD, called these tactics “shenanigans” and called for an end to abuses of the system.

2. Despite broad bipartisan support, the bill has struggled to reach a vote.

The legislation, sponsored by Senator Patrick Leahy, D-Vermont (with cosponsors including Republicans Ted Cruz of Texas, Claire McCaskill of Missouri, and Rand Paul of Kentucky, as well as Democrats Amy Klobuchar of Minnesota, Dianne Feinstein of California, and Sherrod Brown of Ohio), was first introduced in a different version in 2016 and, since then, has enjoyed broad bipartisan support.

However, the bill languished without a vote as it faced opposition from pharmaceutical companies; The Hill reported in April 2018 that the Pharmaceutical Research and Manufacturers of America, known as PhRMA, spent approximately $10 million on lobbying efforts—including efforts to halt progress of the CREATES Act—in the first quarter of 2018.

3. The legislation has support from a pioneer of the generics industry.

Among the most vocal supporters of the bill is former Representative Henry Waxman, D-California, who cosponsored (with Senator Orrin Hatch, R-Utah) the legal foundation for the US generics drug market: The Drug Price Competition and Patent Term Restoration Act of 1984, referred to colloquially as “Hatch-Waxman.”

Waxman told The Center for Biosimilars^®, a sister publication of The American Journal of Managed Care^® (AJMC^®), in February 2018 that the CREATES Act “…Tackles one of the numerous problems driving high drug prices—drug manufacturers’ use of anti-competitive tactics to block access to generic drugs. If passed, the CREATES Act would increase the development and availability of generic drugs. Not only is it good policy, but it could save patients more than $5 billion and the federal government more than $3 billion over 10 years, helping to pay for other necessary federal spending, including Community Health Centers.”

4. An amendment to the bill could limit options for generic and biosimilar developers, however.

Despite Waxman’s support for the legislation, his counterpart, Hatch, has concerns about the CREATES Act, and he has introduced an amendment to the bill, which he has titled the “Hatch-Waxman Integrity Act of 2018.”

Hatch’s amendment would prevent generic and biosimilar drug applicants from availing themselves of both standard litigation procedures (provided for under the Hatch-Waxman Act and the Biologics Price Competition and Innovation Act) and inter partes review (IPR) or post-grant review proceedings in seeking to invalidate patents on drugs.

Hatch said that the amendment would “…prevent companies from using IPR to put added litigation pressure on innovators above and beyond what Hatch-Waxman already provides. And it would prevent a company that rightfully loses a Hatch-Waxman suit from getting a second bite at the apple.”

5. Another amendment seeks to limit the applicability of the bill.

A second proposed amendment, BOM18329, introduced by John Cornyn, R-Texas, would restrict the CREATES Act’s applicability to drugs that are subject to REMS programs that have 1 or more elements to assure safe use.

The legislation would therefore not impact manufacturers who use limited distribution networks (LDNs) to restrict the supply of their products to generic and biosimilar developers; writing in the April 2018 issue of AJMC^®, Laura Karas, MD, MPH, and colleagues explained how LDNs have been used to prevent drug competitors from accessing samples of drugs that are necessary to perform testing.