Congress passed the Food and Drug Administration Amendments Act of 2007 (“FDAAA”) to give the U.S. Food and Drug Administration (“FDA”) new authority to regulate the safety of marketed drugs. As part of this authority, FDA may require drug companies to propose and implement Risk Evaluation and Mitigation Strategy (“REMS”) for certain drugs whose risk- benefit profiles warrant safety measures beyond professional labeling. FDA may require REMS as part of the approval of a new drug or biologic (brand or generic), or for an approved product when new safety information arises. If FDA determines that a drug has been shown to be effective but is associated with an adverse drug experience, the FDA will require that the REMS have elements to assure safe use (“ETASU”). An example of an ETASU is that health care providers who prescribe the drug have particular training or experience or are specially certified.

The FDA, Federal Trade Commission, and generic drug manufacturers have raised concerns that branded drug manufacturers could be using REMS to impede generic competition. One concern is that branded companies may use REMS distribution restrictions to deny generic companies the drug samples they need to conduct necessary testing and otherwise meet the requirements for generic drug approval. Another concern is that branded drug firm may abuse situations where FDA approval of a generic drug is conditioned on the utilization of a single, shared ETASU by both the generic and branded companies. Essentially, the concern is that branded firms are impeding negotiations of a single, shared ETASU in order to delay generic entry.

To address these concerns, the Senate Judiciary Committee introduced Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act of 2016 on June 14, 2016. The bill—co- sponsored by Senators Grassley (R-IA), Klobuchar (D-MN), Leahy (D-VT), and Lee (R-UT)— permits a generic manufacturer to sue the branded manufacturer if: (1) the branded manufacturer fails to “provide sufficient quantities of [a drug sample] on commercially reasonable, market- based terms”; or (2) branded and generic manufacturers are unable to develop single, shared ETASU after 120 days of initiating a request to develop a shared ETASU. The relief contemplated in the bill is (1) a court order that the brand company provide the drug sample or the brand and generic develop single, shared ETASU or generic firm join a pre-existing ETASU; and (2) monetary award.

Additionally, CREATES Act of 2016 incorporates FDA draft guidance on “How to Obtain a Letter from FDA Stating that Bioequivalence Study Protocols Contain Safety Protections Comparable to Applicable REMS for RLD Guidance for Industry.” In situations where generic companies request a sample of a drug covered by a REMS with ETASU, the draft guidance explains how that company can request a letter from FDA stating that (1) the generic company’s protocol contains safety provisions comparable to the sample drug’s; and (2) FDA would not consider providing a drug sample to the generic firm to be a REMS violation. The bill incorporates the letter contemplated by the draft guidance. If a sample drug is covered by ETASU, the generic firm must have authorization from the FDA before it can sue the branded company. CREATES Act of 2016 provides that the FDA will authorize “the eligible product developer to obtain sufficient quantities of [a sample drug] subject to a REMS with ETASU.” Further, the FDA shall provide that authorization within 90 days of request. Similar to the guidance, FDA will grant the authorization if the generic company “has agreed to comply with any conditions [the FDA] determines necessary; or if the development and testing involves human clinical trials, the generic company’s submitted protocol include “protections that provide safety protections comparable to those provided by the REMS” for the sample drug.

Critics of the bill are concerned that the bill allows generic drug manufacturers to adopt less rigorous safety standards for drugs with REMS with ETASU. Additionally, critics note that the bill overlooks the complexity of developing a single, shared ETASU. Proponents of the bill state that the bill provides necessary remedies to generic manufacturers to defeat the branded manufactures’ delay tactics. The latest action on the bill was that Committee on the Judiciary Subcommittee on Antitrust Competition Policy and Consumers Rights held a hearing on June 21,2016.