The CREATES Act and its Provisions Affecting REMS Get Boost from Congressional Budget Office

The CREATES Act (S. 974 and H.R. 2212), which if passed is expected to impact REMS programs, received a boost from the Congressional Budget Office (CBO) on September 18, 2018, when the CBO reported that the CREATES Act would save the government about $7.2 billion in combined spending and deficit reduction between 2019 and 2028.

The CBO released its analysis of the financial impact of the “Creating and Restoring Equal Access to Equivalent Samples Act of 2018” (the “CREATES Act”) on September 18, 2018 (a copy may be accessed here), and its financial impact was found by the CBO to be substantial. The CBO’s estimate of the savings that would accompany implementation of the CREATES Act could serve as the impetus for its passage by Congress in the near future.

The current Senate version of the CREATES Act (S. 974, a copy of which may be accessed here) would create a private right of action that allows developers of generic drugs or biosimilar products to bring civil lawsuits against manufacturers of brand-name drugs if sufficient quantities of reference samples of a branded product are not made available for premarket testing. This provision addresses the generic companies’ long-standing argument that the use of Risk Evaluation & Mitigation Strategies (“REMS”) has been used improperly—to prevent generics from obtaining samples of Brand drugs for testing.  Brand companies have disputed this position, arguing that REMS programs are necessary to manage a known or potentially serious risk associated with a particular drug. FDA has agreed, and since 2007 has required REMS programs for certain drugs. FDA has published a document entitled “A Brief Overview of Risk Evaluation & Mitigation Strategies (REMS),” a copy of which is available here.

In addition, the current Senate bill also would remove a statutory requirement that manufacturers of generic or biosimilar versions of certain drugs that carry a significant risk of serious side effects use the same risk management system as the brand-name reference drug to ensure safe use of the product. In its place, the CREATES Act would provide the FDA with more discretion to allow those manufacturers to use comparable safety systems on a case-by-case basis.

CBO expects that the CREATES Act would allow generic drugs (including biosimilar versions of biologics) to enter the market earlier, on average, than they would under current law. Because of the earlier entry of lower-priced generic drugs, CBO estimates, enacting the legislation would reduce federal spending on prescription drugs.

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