New bill aims to support generic, biosimilar drug competition

The Generics Pharmaceutical Association (GPhA), along with many other groups, is supporting Senate legislation that would help prevent manufacturers from blocking generic and biosimilar drug competition.

The Creating and Restoring Equal Access to Equivalent Samples (“CREATES”) Act was introduced in mid-June by Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa) and Patrick Leahy (D-Vt.). Sen. Grassley said the law was needed because some pharmaceutical manufacturers are misusing the Risk Evaluation and Mitigation Strategy (REMS) program to prevent generic drug development.

“Current law allows for a streamlined approval process whereby generic drug companies can conduct testing of generic versions of a brand-name drug prior to its patent expiration. However, concerns have been raised that some brand-name companies are misusing an FDA program, known as the Risk Evaluation and Mitigation Strategy, to thwart that process by preventing the sale of samples of their product and refusing to allow generic competitors to participate in their Risk Evaluation and Mitigation Strategy protocol,” Grassley’s office said in a statement. “These tactics result in blocking generic drug approval and keeping drug prices high for consumers.”

Stakeholders of CREATES Act

The CREATES Act is supported by consumer groups, generic drug manufacturers, antitrust experts, physicians, pharmacists, hospitals, insurers, and other groups, includingGPhA, AARP, and the National Coalition on Healthcare.

However, there is some opposition to the CREATES Act. The act could harm both branded drug manufacturers and patients, according to Dr. Robert Goldberg and Peter Pitts, founders of the Center for Medicine in the Public Interest.

“The CREATES Act will hold innovators responsible for the actions of generic and biosimilar manufacturers because the bill provides innovators liability protection only for claims arising out of failure to follow adequate safeguards during handling or use of product by the generic or biosimilar manufacturer,” they wrote in CMPI’s DrugWonks blog. “As a result, innovative manufacturers could still be unfairly liable for others’ negligence, long after the medicine has left their control.”

In addition, said Goldberg and Pitts, the act could exacerbate drug shortages and further limit the supply of medically necessary drugs.

“If a medicine has been on the shortage list for more than six months, the medicine is not exempt from the bill. In other words, manufacturers of these products would be forced to divert medicines from their patients - even when the medicines are life sustaining - to ensure supply for their competitors’ clinical trials,” they wrote.

The Turing approach

The GPhA says that REMS misuse costs the U.S. healthcare system $4.5 million annually. The organization cited the actions of Turing Pharmaceuticals, which in 2015 increased the price of its anti-parasitic drug Daraprim from $13.50 to $750 per pill overnight, as an example of a manufacturer misusing the system.

A former Turing employee testified that an “integral part” of Turing’s plan to increase the price of Daraprim was restriction of Daraprim’s distribution, so that generic manufacturers could not obtain samples to manufacture a lower-price alternative, according to GPhA.

Turing wasn’t the only company to adopt this practice. FDA’s Director of the Center for Drug Evaluation and Research testified that, as of January 2016, FDA had received over 100 inquiries from generic product developers who were unable to access samples of an innovator drug to compare and test their generic product.

Shining a light

Chip Davis“GPhA is pleased that the Senate is choosing to shine a light on brand-drug company ploys to block patient access to safe, effective, and more affordable generic and biosimilar medicines,” said Chip Davis, president and CEO of GPhA.

The CREATES Act would allow the sponsor of an ANDA or a biosimilar application to bring an action in federal court to obtain from the brand-name sponsor of a drug or biological product subject the sample it needs to conduct testing that will enable it to seek approval of a generic drug or biosimilar product.

“Provided certain elements are met, a court may ‘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’,” stated the FDA Law Blog.

The bill would also authorize a judge to award monetary damages to an eligible product developer in an 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,” the FDA Law Blog stated.