CREATES Act Hopes to Spur Generic Competition in Pharmaceutical Market

CREATES Act

The CREATES Act hopes to spur generic competition in the pharmaceutical market.

There are not many issues that receive bipartisan support from politicians in the United States, but there is one area where politicians appear willing to work together: drug prices. In February 2019, The Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act was reintroduced by Senator Patrick Leahy of Vermont.  The stated aim of the CREATES Act is to promote competition in the market for drugs and biologics by facilitating the timely entry of lower-cost generic and biosimilars.  More specifically, the bill would allow a would-be generic or biosimilar manufacturer to sue the manufacturer of an originator product to gain access to enough samples of the target drug for testing in the hopes of developing a generic or biosimilar.  For REMS-covered drugs, the act also allows the FDA to approve alternative safety protocols.  The bill was subsequently passed by the House of Representatives on May 29, 2019 and will be sent to the Senate as part of a larger healthcare bill.

The Touted Benefits

Proponents of the bill tout the expected savings, to both patients and the government, as the key benefit of the legislation.  The Congressional Budge Office estimates savings of $3.9 billion over a ten-year period.  Outside of these savings, say proponents, not much of an effect will be felt.  The Act limits the amount of additional monetary damages the generic firm can receive from the civil suit if it can be proven that the manufacturer withheld samples without a legitimate business need, something advocates believe will disincentivize frivolous lawsuits.  The threat of undermining intellectual property laws is also moot, say those in support of the bill, as the bill does not establish any new ground for challenging the IP of a drug manufacturer.

The Potential Detriments

The bill’s detractors worry that giving generic manufacturers the ability to enter into litigation to secure samples will shift the method of obtaining samples from negotiated purchases.  This potential for increased litigation costs, they say, could offset the proposed savings that are being lauded as one of the bill’s primary benefits.  The increased costs to manufacturers could also leave them less funds for new drug development, stifling innovation.  There is further concern that allowing generic manufacturers a way to bypass REMS holds them to a lower standard, one that could endanger patients down the line.

What Does It All Mean?

While it may seem, at first glance, like a daunting change, the CREATES Act does not make it any easier to override patent protection, so product exclusivity will remain unchanged.  Hopefully the act will encourage generic and originator manufacturers to work together to establish a method to provide samples, rather than face the possibility of costly, unnecessary litigation.  As the focus of the bill is ostensibly to help the patient, it will be important to see if alternative REMS requirements do create looser oversight for generics and biosimilars.  Sacrificing safety for cost should not be considered an acceptable solution.  While it is understandable that manufacturers want to protect their existing products, their mission to help patients can be best achieved by focusing efforts on developing new therapies and establishing value-added services that support the needs of existing patients. 

Related Posts