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116th Congress   }                                  {     Rept. 116-55
                        HOUSE OF REPRESENTATIVES
 1st Session     }                                  {           Part 2

======================================================================



 
 CREATING AND RESTORING EQUAL ACCESS TO EQUIVALENT SAMPLES ACT OF 2019

                                _______
                                

  May 10, 2019.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Nadler, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 965]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 965) to promote competition in the market for drugs 
and biological products by facilitating the timely entry of 
lower-cost generic and biosimilar versions of those drugs and 
biological products, having considered the same, report 
favorably thereon without amendment and recommend that the bill 
do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     1
Background and Need for the Legislation..........................     2
Hearings.........................................................     5
Committee Consideration..........................................     6
Committee Votes..................................................     6
Committee Oversight Findings.....................................     6
New Budget Authority and Tax Expenditures........................     6
Congressional Budget Office Cost Estimate........................     6
Duplication of Federal Programs..................................    10
Performance Goals and Objectives.................................    10
Advisory on Earmarks.............................................    10
Section-by-Section Analysis......................................    11
Changes in Existing Law Made by the Bill, as Reported............    13

                          Purpose and Summary

    H.R. 965, the ``Creating and Restoring Equal Access to 
Equivalent Samples (CREATES) Act of 2019,'' is designed to 
address the soaring cost of prescription drugs. The CREATES Act 
targets abusive delay tactics that are used to block the 
development of more affordable generic and biosimilar 
medicines. The legislation establishes a private right of 
action against branded drug companies for generic drug 
companies that are unreasonably denied access to drug samples 
they require to conduct bioequivalence testing for Food and 
Drug Administration (FDA) approval. H.R. 965 also authorizes a 
court to award damages to deter misconduct by branded drug 
companies that withhold samples without a legitimate business 
justification. This legislation is supported by a broad 
coalition of healthcare providers, patient groups, and public-
interest organizations, including AARP, Consumer Reports, and 
Public Citizen, among many others.\1\
---------------------------------------------------------------------------
    \1\See, e.g., Letter from AARP to Representative Jerrold Nadler (D-
NY), Chair, H. Comm. on the Judiciary & Representative Doug Collins (R-
GA), Ranking Member, H. Comm. on the Judiciary (Apr. 30, 2019); Letter 
from Consumer Reports to Representative Jerrold Nadler (D-NY), Chair, 
H. Comm. on the Judiciary & Representative Doug Collins (R-GA), Ranking 
Member, H. Comm. on the Judiciary (Apr. 29, 2019); Letter from Public 
Citizen to Representative Jerrold Nadler (D-NY), Chair, H. Comm. on the 
Judiciary & Representative Doug Collins (R-GA), Ranking Member, H. 
Comm. on the Judiciary (Apr. 29, 2019) (all on file with H. Comm. on 
the Judiciary Democratic staff).
---------------------------------------------------------------------------

                Background and Need for the Legislation


                               BACKGROUND

    The CREATES Act addresses two delay tactics used by branded 
drug companies to block or delay entry by generic competitors. 
The first delay tactic occurs when brand-name drug companies 
prevent potential biosimilar and generic competitors from 
obtaining samples of branded drugs covered by the FDA's Risk, 
Evaluation, and Mitigation Strategy (REMS) program--samples 
that the generics and biosimilar drug makers need to develop 
more affordable alternatives to brand-name products. The second 
delay tactic occurs when brand-name drug companies refuse to 
allow competitors to participate in a required safety protocol, 
which also may be intended to block generic or biosimilar 
competition. According to the non-partisan Congressional Budget 
Office (CBO), these delays impose significant costs in the form 
of higher Medicare expenses.\2\
---------------------------------------------------------------------------
    \2\Cong. Budget Office, H.R. 965 Creating and Restoring Equal 
Access to Equivalent Samples Act of 2019 (2019), https://www.cbo.gov/
system/files/2019-05/hr965_Judiciary.pdf.
---------------------------------------------------------------------------

The FDA's Risk, Evaluation, and Mitigation Strategy (REMS) Program

    The Food and Drug Administration Amendments Act of 2007 
granted the FDA authority to require a REMS from drug 
manufacturers to ensure that a certain drug's benefits outweigh 
its risks.\3\ The FDA has defined REMS as ``required risk 
management plans that use risk minimization strategies beyond 
the professional labeling to ensure that the benefits of 
certain prescription drugs outweigh their risks.''\4\ Through 
REMS safety protocols, the FDA restricts the distribution of 
drugs with dangerous characteristics, such as high toxicities 
and severe side effects, to qualified medical professionals.\5\ 
Examples of REMS requirements include education addressing 
possible risks of serious infection, certification and training 
of prescribers and dispensers, continued monitoring for liver 
damage, and required negative pregnancy tests before dispensing 
the drug to avoid severe birth defects.\6\
---------------------------------------------------------------------------
    \3\Agata Dabrowska & Susan Thaul, Cong. Research Serv., R41983, How 
FDA Approves Drugs and Regulates Their Safety and Effectiveness 19 
(2018), https://fas.org/sgp/crs/misc/R41983.pdf.
    \4\U.S. Food & Drug Admin., A Brief Overview of Risk Evaluation & 
Mitigation Strategies (REMS) 2, https://wayback.archive-it.org/7993/
20190425135753/https://www.fda.gov/downloads/AboutFDA/Transparency/
Basics/UCM328784.pdf.
    \5\U.S. Food & Drug Admin., REMS: FDA's Application of Statutory 
Factors in Determining when a REMS Is Necessary 2-5 (2019), https://
www.fda.gov/media/100307/download.
    \6\U.S. Food & Drug Admin., Risk Evaluation and Mitigation 
Strategies (REMS) 4, https://www.fda.gov/media/105565/download.
---------------------------------------------------------------------------
    More restrictive REMS programs have ``Elements to Assure 
Safe Use'' (ETASU), which can include prescriber experience 
requirements, certification systems, patient monitoring or 
registration, and controlled distribution. These requirements 
restrict a drug's distribution and affect how it can be sold to 
consumers.\7\ ETASU measures are ``designed to be compatible 
with established distribution, procurement, and dispensing 
systems for drugs.''\8\ Since their initiation in 2007, REMS 
programs have become an increasingly prominent part of the FDA 
approval process.\9\ In 2014, nearly 40% of new drugs had REMS 
programs.\10\ Currently, over 60% of existing REMS include 
ETASU requirements.\11\
---------------------------------------------------------------------------
    \7\U.S. Food & Drug Admin., A Brief Overview of Risk Evaluation & 
Mitigation Strategies (REMS) 13, https://wayback.archive-it.org/7993/
20190425135753/https://www.fda.gov/downloads/AboutFDA/Transparency/
Basics/UCM328784.pdf.
    \8\ U.S.C. Sec. 355-1(f)(2)(D)(ii) (2019).
    \9\Alex Brill, Lost Prescription Drug Savings From Use of REMS 
Programs to Delay Generic Market Entry 1 (2014), https://
static1.1.sqspcdn.com/static/f/460582/25228342/1406034596510/
REMS_Study_July.pdf.
    \10\Id.
    \11\Alex Brill, Unrealized Savings from the Misuse of REMS and Non-
REMS Barriers 2 (2018), https://accessiblemeds.org/sites/default/files/
2018-09/REMS_WhitePaper_September 2018%5B2%5D.pdf.
---------------------------------------------------------------------------
    In order to develop generic versions of branded drugs, 
generic manufacturers must acquire samples to conduct testing. 
ETASU restrictions, however, can limit the ability of generic 
manufacturers to obtain samples of REMS-restricted drugs for 
bioequivalence testing for an ANDA.\12\ Without the ability to 
demonstrate bioequivalence in the ANDAs, potential generic 
entrants are unable to obtain FDA approval of drugs that would 
eventually compete with the REMS drugs.\13\
---------------------------------------------------------------------------
    \12\Id.
    \13\Id.
---------------------------------------------------------------------------
    Unlike typical drugs that can be purchased easily on the 
marketplace, drugs covered by these safety protocols require 
direct negotiations with the branded manufacturer.\14\ While 
these negotiations generally center on ensuring safe testing 
and limiting liability, allegations have been made that branded 
drug companies are using REMS restrictions as excuses not to 
sell samples of their branded drugs to generic 
manufacturers.\15\
---------------------------------------------------------------------------
    \14\Press Release, U.S. Food & Drug Admin., Statement from FDA 
Commissioner Scott Gottlieb, M.D., on New Policies to Reduce the 
Ability of Brand Drugs Makers to Use REMS Programs as a Way to Block 
Timely Generic Drug Entry, Helping Promote Competition and Access (May 
31, 2018), https://www.fda.gov/news-events/press-announcements/
statement-fda-commissioner-scott-gottlieb-md-new-policies-reduce-
ability-brand-drug-makers-use-rems.
    \15\See, e.g., Fed. Trade Comm'n Brief as Amicus Curiae at 2, Mylan 
Pharm. Inc. v. Celgene Corp., No. 14-cv-2094 (D.N.J. June 17, 2014), 
http://www.ftc.gov/system/files/documents/amicus_briefs/mylan-
pharmaceuticals-inc.v.celgene-corporation/140617celgeneamicusbrief.pdf; 
Fed. Trade Comm'n Brief as Amicus Curiae at 2, Actelion Pharm. Ltd. v. 
Apotex Inc., No. 12-cv-05743 (D.N.J. Mar. 11, 2013), https://
www.ftc.gov/sites/default/files/documents/amicus_briefs/actelion-
pharmaceuticals-ltd.et-al.v.apotex-inc./130311actelionamicusbrief.pdf.
---------------------------------------------------------------------------

The FDA's Single Shared REMS Program

    After the generic has completed the necessary testing and 
is ready to seek FDA approval to enter the market with a 
generic version of a branded drug containing a REMS with ETASU 
program, the REMS statute requires the generic and branded 
manufacturers to work together to create a Single Shared REMS 
program (``SSRS'').\16\ The FDA may waive this shared-system 
requirement and allow a generic to file its own REMS in two 
situations. The first applies when the burden of creating a 
single, shared system outweighs the benefits.\17\ The second 
occurs when an aspect of the ETASU is ``claimed by a patent 
that has not expired or is a method or process that, as a trade 
secret, is entitled to protection'' and the generic certifies 
that it has taken (unsuccessful) steps to obtain a license.\18\
---------------------------------------------------------------------------
    \16\21 U.S.C. 335-1(i)(1)(B).
    \17\Id. 335-1(i)(1)(B)(i).
    \18\Id. 335-1(i)(1)(B)(ii).
---------------------------------------------------------------------------

                        NEED FOR THE LEGISLATION

    Branded drug manufacturers have allegedly abused the REMS 
process to block or delay entry by price-reducing generic 
competitors.\19\ One study estimates that American consumers 
have lost $5.4 billion in annual savings due to delays in 
accessing drug samples caused by REMS misuse or other 
restricted access programs.\20\ The CBO estimates that these 
delays cost taxpayers $3.9 billion in direct government 
spending over a ten-year period.\21\
---------------------------------------------------------------------------
    \19\See, e.g., Press Release, U.S. Food & Drug Admin., Statement 
from FDA Commissioner Scott Gottlieb, M.D., on New Agency Efforts to 
Shine Light on Situations Where Drug Makers May Be Pursuing Gaming 
Tactics to Delay Generic Competition (May 17, 2018), https://
www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm607930.htm.
    \20\Alex Brill, Lost Prescription Drug Savings From Use of REMS 
Programs to Delay Generic Market Entry 1 (2014), https://
static1.1.sqspcdn.com/static/f/460582/25228342/1406034596510/
REMS_Study_July.pdf.
    \21\Cong. Budget Office, H.R. 965 Creating and Restoring Equal 
Access to Equivalent Samples Act of 2019 (2019), https://www.cbo.gov/
system/files/2019-05/hr965_Judiciary.pdf.
---------------------------------------------------------------------------
    In response, potential generic entrants have attempted to 
use the antitrust laws to force manufacturers of REMS-
restricted drugs to provide them with samples.\22\ Without 
these samples, generic manufacturers are unable to conduct 
necessary tests to demonstrate their products are 
``bioequivalent'' to, or work in the same way as, their branded 
counterparts.
---------------------------------------------------------------------------
    \22\See, e.g., Complaint at 4, Mylan Pharm. Inc. v. Celgene Corp., 
No. 14-cv-2094 (D.N.J. Apr. 3, 2014); Complaint for Declaratory 
Judgment at 7-8, Actelion Pharm. Ltd. v. Apotex Inc., No. 12-cv-05743 
(D.N.J. Sept. 14, 2012).
---------------------------------------------------------------------------
    Antitrust litigation, however, is both immensely time-
consuming and uncertain. As the non-partisan Congressional 
Research Service has noted, a ``generic product developer's 
ability to obtain relief for sample denial under antitrust law 
is currently uncertain. Under longstanding antitrust 
precedents, a company--even a monopolist--generally does not 
have a duty to deal with its competitors.''\23\ Furthermore, 
even successful litigation may not provide complete relief for 
abusive delays. Markus Meier, then-Acting Director of the 
Federal Trade Commission's (FTC's) Bureau of Competition, 
testified before the Subcommittee on Regulatory Reform, 
Commercial, and Antitrust Law\24\ last Congress that
---------------------------------------------------------------------------
    \23\Cong. Research Serv., The CREATES Act of 2019 and Lowering Drug 
Prices: Legal Background & Overview 3 (2019), https://fas.org/sgp/crs/
misc/LSB10272.pdf.
    \24\The Subcommittee on Regulatory Reform, Commercial, and 
Antitrust Law was renamed the Subcommittee on Antitrust, Commercial, 
and Administrative Law in the 116th Congress.

        even if a generic firm is ultimately able to prevail in 
        an antitrust action and all subsequent appeals 
        therefrom, such litigation can create substantial 
        delays in obtaining the needed samples and a 
        corresponding delay in generic approval. Accordingly, 
        even a successful antitrust challenge is unlikely to 
        provide immediate redress.\25\
---------------------------------------------------------------------------
    \25\Antitrust Concerns and the FDA Approval Process: Hearing Before 
the Subcomm. on Regulatory Reform, Commercial, and Antitrust Law of the 
H. Comm. on the Judiciary, 115th Cong. (2017) (statement of Mr. Markus 
Meier at 10), https://www.ftc.gov/system/files/documents/
public_statements/1234663/
p859900_commission_testimony_re_at_concerns_and_the_fda_approval_ 
process_house_7-27-17.pdf.

    Branded drug companies may also use the requirement of a 
SSRS to block generic entry. The generic drug manufacturer has 
to negotiate with the branded manufacturer to enter into a 
shared REMS programs before the generic drug can be 
approved.\26\ The negotiations to reach agreement on a SSRS can 
extend for long periods of time, delaying market entry of a 
generic drug.\27\ Under current law, branded companies have an 
opportunity to delay generic entry not only on the front end by 
denying access to samples, but also ``on the back end of the 
[Abbreviated New Drug Application] process, by denying the 
generic firm access to the existing REMS distribution system so 
that the FDA cannot approve the generic firm's ANDA application 
and labelling.''\28\
---------------------------------------------------------------------------
    \26\Press Release, U.S. Food & Drug Admin., Statement from FDA 
Commissioner Scott Gottlieb, M.D., on New Policies to Reduce the 
Ability of Brand Drugs Makers to Use REMS Programs as a Way to Block 
Timely Generic Drug Entry, Helping Promote Competition and Access (May 
31, 2018), https://www.fda.gov/news-events/press-announcements/
statement-fda-commissioner-scott-gottlieb-md-new-policies-reduce-
ability-brand-drug-makers-use-rems.
    \27\Id.
    \28\Antitrust Concerns and the FDA Approval Process: Hearing Before 
the Subcomm. on Regulatory Reform, Commercial, and Antitrust Law of the 
H. Comm. on the Judiciary, 115th Cong. (2017) (statement of Mr. Markus 
Meier at 6-7), https://www.ftc.gov/system/files/documents/
public_statements/1234663/
p859900_commission_testimony_re_at_concerns_and_the_fda_approval_ 
process_house_ 7-27-17.pdf.
---------------------------------------------------------------------------

                                Hearings

    For the purposes of section 103(i) of H. Res. 6 of the 
116th Congress, the following hearing was used to consider H.R. 
965: Hearing on ``Diagnosing the Problem: Exploring the Effects 
of Consolidation and Anticompetitive conduct in Health Care 
Markets,''\29\ held before the Subcommittee on Antitrust, 
Commercial, and Administrative Law, on March 7, 2019.\30\ At 
this hearing, several witnesses testified about competition 
issues in health care markets, including Dr. Fiona Scott 
Morton, Professor of Economics at Yale School of Management; 
Dr. Martin Gaynor, Professor of Economics and Health Policy at 
Carnegie Mellon University; Michael Kades, Director of Markets 
and Competition Policy at Washington Center for Equitable 
Growth; and Dr. Craig Garthwaite, Herman R. Smith Research 
Professor at Northwestern University's Kellogg School of 
Management. In particular, Professor Scott Morton and Messrs. 
Kades and Garthwaite all expressed support for the CREATES Act.
---------------------------------------------------------------------------
    \29\Diagnosing the Problem: Exploring the Effects of Consolidation 
and Anticompetitive Conduct in Health Care Markets, Hearing Before the 
Subcomm. on Antitrust, Commercial, and Administrative Law of the H. 
Comm. on the Judiciary, 116th Cong. (2019).
    \30\Diagnosing the Problem: Exploring the Effects of Consolidation 
and Anticompetitive Conduct in Health Care Markets, Hearing Before the 
Subcomm. on Antitrust, Commercial, and Administrative Law of the H. 
Comm. on the Judiciary, 116th Cong. (2019).
---------------------------------------------------------------------------
    In the 115th Congress, H.R. 2212, the CREATES Act of 2017, 
was introduced by then-Subcommittee Chair Tom Marino (R-PA) and 
then-Ranking Member David N. Cicilline (D-RI).\31\ The Senate 
companion, S. 974, was introduced by Senator Patrick Leahy (D-
VT) and reported out of the Senate Judiciary Committee 
favorably.\32\
---------------------------------------------------------------------------
    \31\Creating and Restoring Equal Access to Equivalent Samples Act 
of 2017, H.R. 2212, 115th Cong. (2017).
    \32\Creating and Restoring Equal Access to Equivalent Samples Act 
of 2018, S. 974, 115th Cong. (as reported by S. Comm. on the Judiciary, 
June 21, 2018).
---------------------------------------------------------------------------
    In 2017, the Subcommittee held a two-paneled hearing on 
``Antitrust Concerns and the FDA Approval Process.''\33\ On the 
first panel, the Subcommittee heard testimony from Dr. Scott 
Gottlieb, M.D., Commissioner of the FDA, and Markus Meier, 
Acting Director, Bureau of Competition at the Federal Trade 
Commisson. On the second panel, the Subcommittee heard 
testimony from Professor David Olson, Boston College Law 
School; Professor Erika Lietzan, University of Missouri School 
of Law; Alden Abbott, the Heritage Foundation; and Professor 
Aaron Kesselheim, M.D., M.P.H., Harvard Medical School. At the 
hearing, Commissioner Gottlieb identified REMS abuse as an 
ongoing concern for the FDA, and Messrs. Meier and Abbott, Dr. 
Kesselheim, and Professor Olson all expressed support for the 
2017 version of the CREATES Act, which is substantively 
identical to H.R. 965 in the 116th Congress.
---------------------------------------------------------------------------
    \33\Antitrust Concerns and the FDA Approval Process, Hearing Before 
the Subcomm. on Regulatory Reform, Commercial, and Antitrust Law of the 
H. Comm. on the Judiciary, 115th Cong. (2017).
---------------------------------------------------------------------------

                        Committee Consideration

    On April 30, 2019, the Committee met in open session and 
ordered the bill, H.R. 965, favorably reported, without 
amendment, by voice vote, a quorum being present.

                            Committee Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that no 
rollcall votes occurred during the Committee's consideration of 
H.R. 965.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee advises that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives is inapplicable because this legislation does 
not provide new budgetary authority or increased tax 
expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the bill, H.R. 965, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                       Washington, DC, May 8, 2019.
Hon. Jerrold Nadler,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2375, the Preserve 
Access to Affordable Generics and Biosimilars Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Julia 
Christensen.
            Sincerely,
                                                Keith Hall,
                                                          Director.
Enclosure.
cc:
        Honorable Doug Collins
        Ranking Member

        
        

    H.R. 2375 would make certain agreements--used to settle 
claims of patent infringement between sponsors of brand-name, 
generic, or biosimilar drugs and relating to the sale of a drug 
or biological product--presumptively illegal under antitrust 
law. The bill would require particular types of agreements 
arising from proceedings conducted by the Patent Trial and 
Appeal Board (PTAB) to be reported to Federal Trade Commission 
(FTC) and the Department of Justice (DOJ). H.R. 2375 also would 
establish the authority to impose civil penalties when a party 
to a settlement is found to have violated the bill's 
requirements.
    CBO expects that the bill would accelerate the availability 
of lower-priced generic or biosimilar drugs that would have 
been affected by agreements targeted by the bill and reduce the 
average price of drugs paid by federal health programs that 
purchase drugs or provide health insurance that covers drugs. 
In total, CBO estimates that enacting H.R. 2375 would decrease 
the deficit by $613 million over the 2019-2029 period. That 
amount includes a $520 million reduction in direct spending and 
a $93 million increase in revenues.
    CBO also estimates that implementing H.R. 2375 would 
decrease spending subject to appropriation by $24 million over 
the 2019-2024 period, assuming appropriation actions consistent 
with the bill. That decrease would result primarily because 
lower estimated drug prices would reduce costs for 
discretionary health programs.
    Details of the estimated budgetary effect of H.R. 2375 are 
shown in Table 1. Those effects fall primarily within budget 
functions 370 (commerce and housing credit), 550 (health), and 
570 (Medicare).

                                                                       TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF H.R. 2375
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                             By fiscal year, millions of dollars--
                                                             -----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                               2019-      2019-
                                                                 2019      2020      2021      2022      2023      2024      2025      2026      2027      2028      2029      2024       2029
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                  Decreases in Direct Spending
 
Estimated Budget Authority..................................         0         0       -21       -53       -63       -56       -58       -61       -65       -74       -69       -193       -520
Estimated Outlays...........................................         0         0       -21       -53       -63       -56       -58       -61       -65       -74       -69       -193       -520
    On-Budget...............................................         0         0       -21       -53       -63       -56       -58       -61       -65       -74       -69       -192       -518
    Off-Budgeta.............................................         0         0         *         *         *         *         *         *         *         *         *         -1         -2
 
                                                                                      Increases in Revenues
 
Estimated Revenues..........................................         0         0         3         9        11        11        10        11        12        12        13         34         93
    On-Budget...............................................         0         0         3         6         8         8         7         8         9         9        10         25         69
    Off-Budget..............................................         0         0         1         2         3         3         3         3         3         3         3          9         24
 
                                                            Net Decrease in the Deficit From Changes in Direct Spending and Revenues
 
Effect on the Deficit.......................................         0         0       -24       -62       -74       -67       -68       -72       -77       -86       -82       -227       -613
    On-Budget...............................................         0         0       -23       -59       -71       -64       -66       -69       -74       -83       -78       -217       -587
    Off-Budget..............................................         0         0        -1        -3        -3        -3        -3        -3        -3        -3        -4        -10        -26
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
                                                                 Increases or Decreases (-) in Spending Subject to Appropriation
 
Estimated Authorization.....................................         0         *        -3        -6        -8        -7      n.e.      n.e.      n.e.      n.e.      n.e.        -24       n.e.
Estimated Outlays...........................................         0         *        -3        -6        -8        -7      n.e.      n.e.      n.e.      n.e.      n.e.        -24       n.e.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Components may not sum to totals because of rounding; n.e. = not estimated; * = between -$500,000 and zero.
aIncludes off-budget effects on the operating costs of the U.S. Postal Service.

    By enhancing FTC authority to restrict certain agreements 
between sponsors of brand-name, generic, or biosimilar drugs, 
H.R. 2375 would impose a private-sector mandate as defined in 
the Unfunded Mandates Reform Act (UMRA). The bill also would 
impose a private-sector mandate by requiring those 
manufacturers to notify the FTC of agreements that resolve PTAB 
proceedings. CBO estimates the cost of the mandate, 
particularly in the form of lost revenues, would exceed the 
threshold for private-sector mandates established in UMRA ($164 
million in 2019, adjusted annually for inflation) in at least 
two of the first five years the mandate is in effect.
    On April 26, 2019, CBO transmitted an estimate for H.R. 
1499, the Protecting Consumer Access to Generic Drugs Act of 
2019, as ordered reported by the House Committee on Energy and 
Commerce on April 3, 2019. CBO's estimates of the effect on the 
deficit through 2029 for the two bills are the same. In 
different ways, both H.R. 2375 and H.R. 1499 would modify the 
conduct of enforcement actions by FTC against parties to 
certain agreements to settle a claim of patent infringement and 
would impose significant restrictions on the terms of 
compensation in affected agreements. H.R. 2375 also would 
require particular types of agreements relating to PTAB 
proceedings to be filed with FTC and the DOJ; H.R. 1499 does 
not contain a comparable provision. CBO expects that both bills 
would accelerate, on average, the availability of lower-priced 
generic and biosimilar drugs to a similar extent and would 
generate an equivalent amount of budgetary savings from 2020 
through 2029.
    The CBO staff contact for this estimate is Julia 
Christensen. The estimate was reviewed by Leo Lex, Deputy 
Assistant Director for Budget Analysis.

                    Duplication of Federal Programs

    No provision of H.R. 965 establishes or reauthorizes a 
program of the Federal government known to be duplicative of 
another federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

                    Performance Goals and Objectives

    The Committee states that pursuant to clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, H.R. 
965 would substantially lower drug prices by making it easier 
for generic pharmaceutical companies to obtain drug samples 
from branded companies, which they require in order to perform 
testing necessary to enter the market. The CREATES Act seeks to 
end the abusive delay in the provision of samples by providing 
generic and biosimilar competitors with tailored relief to 
obtain samples necessary to enter the market.

                          Advisory on Earmarks

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 965 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(d), 9(e), or 9(f) of rule XXI.

                      Section-by-Section Analysis

    The following discussion describes the bill as reported by 
the Committee.
    Section 1. Short Title. Section 1 sets forth the short 
title of the legislation as the ``Creating and Restoring Equal 
Access to Equivalent Samples Act of 2019'' or the ``CREATES Act 
of 2019''.
    Section 2. Findings. Section 2 sets forth congressional 
findings relating to drugs and biological products that are 
subject to REMS.
    Section 3. Actions for Delays of Generic Drugs and 
Biosimilar Biological Products. Section 3(a) sets forth various 
definitions.
    Section 3(b) establishes a private right of action for 
prospective generic or biosimilar applicants who are denied 
samples of the brand product needed for tests to support 
approval of the generic or biosimilar application. An eligible 
product developer may bring a civil action against the license 
holder for a covered product in an appropriate U.S. district 
court alleging that the license holder has declined to provide 
sufficient quantities of the covered product to the eligible 
product developer on commercially reasonable, market-based 
terms.
    To prevail in a civil action brought under the CREATES Act, 
an eligible product developer must prove, by a preponderance of 
the evidence, the following elements: (1) the covered product 
is not subject to a risk evaluation and mitigation strategy 
with elements to assure safe use (REMS with ETASU); or if the 
covered product is subject to a REMS with ETASU, the eligible 
product developer has obtained a ``covered product 
authorization'' from the Secretary of Health and Human Services 
(the Secretary) and provided a copy of that authorization to 
the license holder; (2) the product developer has not been able 
to obtain sufficient quantities of the covered product on 
commercially reasonable, market-based terms (as of the date on 
which the civil action is filed); (3) the product developer has 
requested to purchase such quantities from the license holder; 
and (4) the license holder has not delivered such quantities on 
commercially reasonable, market-based terms within 31 days 
after receiving the request for products not subject to REMS 
with ETASU, or within 31 days after receiving the request or a 
copy of the covered product authorization, whichever is later, 
for products subject to REMS with ETASU.
    Section 3(b)(3) establishes an affirmative defense to a 
civil action brought under the Act if the license holder can 
establish, by a preponderance of the evidence, that: (1) it was 
not engaged in manufacturing the covered product and did not 
have access to inventory of the covered product when the 
product developer made the request; or (2) the license holder 
sells the product through agents, distributors, or wholesalers; 
the license holder has placed no implicit or explicit 
restrictions on the sale of the covered product; and the 
product developer can purchase the product from agents, 
distributors, or wholesalers of the license holder on 
commercially reasonable, market-based terms.
    Section 3(b)(2)(B) establishes a process for a product 
developer to submit a request for and receive an authorization 
from the Department of Health and Human Services to obtain 
sufficient quantities of a covered product subject to a REMS 
with ETASU. This section requires that the Secretary must issue 
a written authorization within 120 days of receiving an 
appropriate request. For development and testing not involving 
clinical trials, the product developer must agree to comply 
with any conditions the Secretary determines necessary. For 
development and testing involving clinical trials, the product 
developer must submit protocols, informed consent documents, 
and other informational materials about the testing that 
contain safety protections comparable to those provided by the 
REMS for the covered product--or otherwise satisfy the 
Secretary that such protections will be provided--and meet any 
other requirements the Secretary may establish. The 
authorization shall state that the license holder's provision 
of the product will not be a violation of the REMS for the 
covered product.
    Section 3(b)(4) sets forth remedies for a product developer 
that prevails in a civil action established by this section. 
These include ordering the license holder to provide sufficient 
quantities of the product without delay, on commercially 
reasonable, market-based terms, and awarding the product 
developer reasonable attorney's fees. Additionally, if the 
court finds that the license holder delayed providing 
sufficient quantities of the product ``without a legitimate 
business justification'' or failed to comply with the court's 
order to provide the product, the court may award the product 
developer damages ``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. These damages may not be 
greater than the revenue the license holder earned on the 
product during the period beginning on the date 31 days after 
receiving the request or 31 days after receiving a copy of the 
covered product authorization (depending on whether the covered 
product is subject to a REMS with ETASU) and ending on the date 
the product developer ultimately received sufficient quantities 
of the covered product. To avoid delay, the court may issue an 
order requiring the provision of samples of the covered product 
before conducting further proceedings that may be necessary to 
determine whether a monetary award or attorney's fees are 
appropriate.
    Section 3(c) limits the liability of license holders for 
any claims under state, federal, or local law arising out of 
the eligible product developer's failure to follow adequate 
safeguards during any product development or testing 
activities, such as the transportation, handling, use, or 
disposal of the product.
    Section 3(d) clarifies that providing samples of the 
product under a covered product authorization will not be 
considered a violation of any REMS requirements that may be in 
place for the product.
    Section 3(e) establishes a rule of construction that 
nothing in this Act shall be construed to limit the operation 
of the antitrust laws.
    Section 4. REMS Approval Process for Subsequent Filers. 
Section 4 amends section 505-1 of the Federal Food, Drug, and 
Cosmetic Act (FDCA) to: (1) authorize the Secretary to require 
a drug manufacturer to submit a proposed modification to a REMS 
strategy that has already been approved by the Secretary in 
order to accommodate different, comparable approved REMS 
strategies for generic drug applicants; and (2) establish that 
a generic drug applicant may use a single, shared ETASU system 
with the listed drug, or a different, comparable aspect of 
ETASU. Section 4 further amends the FDCA to provide that the 
Secretary may require a generic drug to use a single, shared 
ETASU system if the Secretary determines that no different, 
comparable aspect of ETASU satisfies the statutory 
requirements. Finally, Section 4 amends the FDCA to define the 
terms ``different, comparable aspect of the elements to assure 
safe use'' and ``different, comparable approved risk evaluation 
and mitigation strategies'' to mean a REMS ``for a drug that is 
the subject of an application under section 505(j) that uses 
different methods or operational means than the strategy 
required under subsection (a) for the applicable listed drug, 
or other application under section 505(j) with the same such 
listed drug, but achieves the same level of safety as such 
strategy.''

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, H.R. 965, as reported, are shown as follows (existing 
law proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no changes 
are proposed is shown in roman):

          Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

                  FEDERAL FOOD, DRUG, AND COSMETIC ACT




           *       *       *       *       *       *       *
                      CHAPTER V--DRUGS AND DEVICES


Subchapter A--Drugs and Devices

           *       *       *       *       *       *       *



SEC. 505-1. RISK EVALUATION AND MITIGATION STRATEGIES.

  (a) Submission of Proposed Strategy.--
          (1) Initial approval.--If the Secretary, in 
        consultation with the office responsible for reviewing 
        the drug and the office responsible for postapproval 
        safety with respect to the drug, determines that a risk 
        evaluation and mitigation strategy is necessary to 
        ensure that the benefits of the drug outweigh the risks 
        of the drug, and informs the person who submits such 
        application of such determination, then such person 
        shall submit to the Secretary as part of such 
        application a proposed risk evaluation and mitigation 
        strategy. In making such a determination, the Secretary 
        shall consider the following factors:
                  (A) The estimated size of the population 
                likely to use the drug involved.
                  (B) The seriousness of the disease or 
                condition that is to be treated with the drug.
                  (C) The expected benefit of the drug with 
                respect to such disease or condition.
                  (D) The expected or actual duration of 
                treatment with the drug.
                  (E) The seriousness of any known or potential 
                adverse events that may be related to the drug 
                and the background incidence of such events in 
                the population likely to use the drug.
                  (F) Whether the drug is a new molecular 
                entity.
          (2) Postapproval requirement.--
                  (A) In general.--If the Secretary has 
                approved a covered application (including an 
                application approved before the effective date 
                of this section) and did not when approving the 
                application require a risk evaluation and 
                mitigation strategy under paragraph (1), the 
                Secretary, in consultation with the offices 
                described in paragraph (1), may subsequently 
                require such a strategy for the drug involved 
                (including when acting on a supplemental 
                application seeking approval of a new 
                indication for use of the drug) if the 
                Secretary becomes aware of new safety 
                information and makes a determination that such 
                a strategy is necessary to ensure that the 
                benefits of the drug outweigh the risks of the 
                drug.
                  (B) Submission of proposed strategy.--Not 
                later than 120 days after the Secretary 
                notifies the holder of an approved covered 
                application that the Secretary has made a 
                determination under subparagraph (A) with 
                respect to the drug involved, or within such 
                other reasonable time as the Secretary requires 
                to protect the public health, the holder shall 
                submit to the Secretary a proposed risk 
                evaluation and mitigation strategy.
          (3) Abbreviated new drug applications.--The 
        applicability of this section to an application under 
        section 505(j) is subject to subsection (i).
          (4) Non-delegation.--Determinations by the Secretary 
        under this subsection for a drug shall be made by 
        individuals at or above the level of individuals 
        empowered to approve a drug (such as division directors 
        within the Center for Drug Evaluation and Research).
  (b) Definitions.--For purposes of this section:
          (1) Adverse drug experience.--The term ``adverse drug 
        experience'' means any adverse event associated with 
        the use of a drug in humans, whether or not considered 
        drug related, including--
                  (A) an adverse event occurring in the course 
                of the use of the drug in professional 
                practice;
                  (B) an adverse event occurring from an 
                overdose of the drug, whether accidental or 
                intentional;
                  (C) an adverse event occurring from abuse of 
                the drug;
                  (D) an adverse event occurring from 
                withdrawal of the drug; and
                  (E) any failure of expected pharmacological 
                action of the drug, which may include reduced 
                effectiveness under the conditions of use 
                prescribed in the labeling of such drug, but 
                which may not include reduced effectiveness 
                that is in accordance with such labeling.
          (2) Covered application.--The term ``covered 
        application'' means an application referred to in 
        section 505(p)(1)(A).
          (3) New safety information.--The term ``new safety 
        information'', with respect to a drug, means 
        information derived from a clinical trial, an adverse 
        event report, a postapproval study (including a study 
        under section 505(o)(3)), or peer-reviewed biomedical 
        literature; data derived from the postmarket risk 
        identification and analysis system under section 
        505(k); or other scientific data deemed appropriate by 
        the Secretary about--
                  (A) a serious risk or an unexpected serious 
                risk associated with use of the drug that the 
                Secretary has become aware of (that may be 
                based on a new analysis of existing 
                information) since the drug was approved, since 
                the risk evaluation and mitigation strategy was 
                required, or since the last assessment of the 
                approved risk evaluation and mitigation 
                strategy for the drug; or
                  (B) the effectiveness of the approved risk 
                evaluation and mitigation strategy for the drug 
                obtained since the last assessment of such 
                strategy.
          (4) Serious adverse drug experience.--The term 
        ``serious adverse drug experience'' is an adverse drug 
        experience that--
                  (A) results in--
                          (i) death;
                          (ii) an adverse drug experience that 
                        places the patient at immediate risk of 
                        death from the adverse drug experience 
                        as it occurred (not including an 
                        adverse drug experience that might have 
                        caused death had it occurred in a more 
                        severe form);
                          (iii) inpatient hospitalization or 
                        prolongation of existing 
                        hospitalization;
                          (iv) a persistent or significant 
                        incapacity or substantial disruption of 
                        the ability to conduct normal life 
                        functions; or
                          (v) a congenital anomaly or birth 
                        defect; or
                  (B) based on appropriate medical judgment, 
                may jeopardize the patient and may require a 
                medical or surgical intervention to prevent an 
                outcome described under subparagraph (A).
          (5) Serious risk.--The term ``serious risk'' means a 
        risk of a serious adverse drug experience.
          (6) Signal of a serious risk.--The term ``signal of a 
        serious risk'' means information related to a serious 
        adverse drug experience associated with use of a drug 
        and derived from--
                  (A) a clinical trial;
                  (B) adverse event reports;
                  (C) a postapproval study, including a study 
                under section 505(o)(3);
                  (D) peer-reviewed biomedical literature;
                  (E) data derived from the postmarket risk 
                identification and analysis system under 
                section 505(k)(4); or
                  (F) other scientific data deemed appropriate 
                by the Secretary.
          (7) Responsible person.--The term ``responsible 
        person'' means the person submitting a covered 
        application or the holder of the approved such 
        application.
          (8) Unexpected serious risk.--The term ``unexpected 
        serious risk'' means a serious adverse drug experience 
        that is not listed in the labeling of a drug, or that 
        may be symptomatically and pathophysiologically related 
        to an adverse drug experience identified in the 
        labeling, but differs from such adverse drug experience 
        because of greater severity, specificity, or 
        prevalence.
  (c) Contents.--A proposed risk evaluation and mitigation 
strategy under subsection (a) shall--
          (1) include the timetable required under subsection 
        (d); and
          (2) to the extent required by the Secretary, in 
        consultation with the office responsible for reviewing 
        the drug and the office responsible for postapproval 
        safety with respect to the drug, include additional 
        elements described in subsections (e) and (f).
  (d) Minimal Strategy.--For purposes of subsection (c)(1), the 
risk evaluation and mitigation strategy for a drug shall 
require a timetable for submission of assessments of the 
strategy that--
          (1) includes an assessment, by the date that is 18 
        months after the strategy is initially approved;
          (2) includes an assessment by the date that is 3 
        years after the strategy is initially approved;
          (3) includes an assessment in the seventh year after 
        the strategy is so approved; and
          (4) subject to paragraphs (1), (2), and (3)--
                  (A) is at a frequency specified in the 
                strategy;
                  (B) is increased or reduced in frequency as 
                necessary as provided for in subsection 
                (g)(4)(A); and
                  (C) is eliminated after the 3-year period 
                described in paragraph (1) if the Secretary 
                determines that serious risks of the drug have 
                been adequately identified and assessed and are 
                being adequately managed.
  (e) Additional Potential Elements of Strategy.--
          (1) In general.--The Secretary, in consultation with 
        the offices described in subsection (c)(2), may under 
        such subsection require that the risk evaluation and 
        mitigation strategy for a drug include 1 or more of the 
        additional elements described in this subsection if the 
        Secretary makes the determination required with respect 
        to each element involved.
          (2) Medication guide; patient package insert.--The 
        risk evaluation and mitigation strategy for a drug may 
        require that, as applicable, the responsible person 
        develop for distribution to each patient when the drug 
        is dispensed--
                  (A) a Medication Guide, as provided for under 
                part 208 of title 21, Code of Federal 
                Regulations (or any successor regulations); and
                  (B) a patient package insert, if the 
                Secretary determines that such insert may help 
                mitigate a serious risk of the drug.
          (3) Communication plan.--The risk evaluation and 
        mitigation strategy for a drug may require that the 
        responsible person conduct a communication plan to 
        health care providers, if, with respect to such drug, 
        the Secretary determines that such plan may support 
        implementation of an element of the strategy (including 
        under this paragraph). Such plan may include--
                  (A) sending letters to health care providers;
                  (B) disseminating information about the 
                elements of the risk evaluation and mitigation 
                strategy to encourage implementation by health 
                care providers of components that apply to such 
                health care providers, or to explain certain 
                safety protocols (such as medical monitoring by 
                periodic laboratory tests)
                  (C) disseminating information to health care 
                providers through professional societies about 
                any serious risks of the drug and any protocol 
                to assure safe use; or
                  (D) disseminating information to health care 
                providers about drug formulations or 
                properties, including information about the 
                limitations or patient care implications of 
                such formulations or properties, and how such 
                formulations or properties may be related to 
                serious adverse drug events associated with use 
                of the drug.
          (4) Packaging and disposal.--The Secretary may 
        require a risk evaluation mitigation strategy for a 
        drug for which there is a serious risk of an adverse 
        drug experience described in subparagraph (B) or (C) of 
        subsection (b)(1), taking into consideration the 
        factors described in subparagraphs (C) and (D) of 
        subsection (f)(2) and in consultation with other 
        relevant Federal agencies with authorities over drug 
        disposal packaging, which may include requiring that--
                  (A) the drug be made available for dispensing 
                to certain patients in unit dose packaging, 
                packaging that provides a set duration, or 
                another packaging system that the Secretary 
                determines may mitigate such serious risk; or
                  (B) the drug be dispensed to certain patients 
                with a safe disposal packaging or safe disposal 
                system for purposes of rendering drugs 
                nonretrievable (as defined in section 1300.05 
                of title 21, Code of Federal Regulations (or 
                any successor regulation)) if the Secretary 
                determines that such safe disposal packaging or 
                system may mitigate such serious risk and is 
                sufficiently available.
  (f) Providing Safe Access for Patients to Drugs With Known 
Serious Risks That Would Otherwise Be Unavailable.--
          (1) Allowing safe access to drugs with known serious 
        risks.--The Secretary, in consultation with the offices 
        described in subsection (c)(2), may require that the 
        risk evaluation and mitigation strategy for a drug 
        include such elements as are necessary to assure safe 
        use of the drug, because of its inherent toxicity or 
        potential harmfulness, if the Secretary determines 
        that--
                  (A) the drug, which has been shown to be 
                effective, but is associated with a serious 
                adverse drug experience, can be approved only 
                if, or would be withdrawn unless, such elements 
                are required as part of such strategy to 
                mitigate a specific serious risk listed in the 
                labeling of the drug; and
                  (B) for a drug initially approved without 
                elements to assure safe use, other elements 
                under subsections (c), (d), and (e) are not 
                sufficient to mitigate such serious risk.
          (2) Assuring access and minimizing burden.--Such 
        elements to assure safe use under paragraph (1) shall--
                  (A) be commensurate with the specific serious 
                risk listed in the labeling of the drug;
                  (B) within 30 days of the date on which any 
                element under paragraph (1) is imposed, be 
                posted publicly by the Secretary with an 
                explanation of how such elements will mitigate 
                the observed safety risk;
                  (C) considering such risk, not be unduly 
                burdensome on patient access to the drug, 
                considering in particular--
                          (i) patients with serious or life-
                        threatening diseases or conditions;
                          (ii) patients who have difficulty 
                        accessing health care (such as patients 
                        in rural or medically underserved 
                        areas); and
                          (iii) patients with functional 
                        limitations; and
                  (D) to the extent practicable, so as to 
                minimize the burden on the health care delivery 
                system--
                          (i) conform with elements to assure 
                        safe use for other drugs with similar, 
                        serious risks; and
                          (ii) be designed to be compatible 
                        with established distribution, 
                        procurement, and dispensing systems for 
                        drugs.
          (3) Elements to assure safe use.--The elements to 
        assure safe use under paragraph (1) shall include 1 or 
        more goals to mitigate a specific serious risk listed 
        in the labeling of the drug and, to mitigate such risk, 
        may require that--
                  (A) health care providers who prescribe the 
                drug have particular training or experience, or 
                are specially certified (the opportunity to 
                obtain such training or certification with 
                respect to the drug shall be available to any 
                willing provider from a frontier area in a 
                widely available training or certification 
                method (including an on-line course or via 
                mail) as approved by the Secretary at 
                reasonable cost to the provider);
                  (B) pharmacies, practitioners, or health care 
                settings that dispense the drug are specially 
                certified (the opportunity to obtain such 
                certification shall be available to any willing 
                provider from a frontier area);
                  (C) the drug be dispensed to patients only in 
                certain health care settings, such as 
                hospitals;
                  (D) the drug be dispensed to patients with 
                evidence or other documentation of safe-use 
                conditions, such as laboratory test results;
                  (E) each patient using the drug be subject to 
                certain monitoring; or
                  (F) each patient using the drug be enrolled 
                in a registry.
          (4) Implementation system.--The elements to assure 
        safe use under paragraph (1) that are described in 
        subparagraphs (B), (C), and (D) of paragraph (3) may 
        include a system through which the applicant is able to 
        take reasonable steps to--
                  (A) monitor and evaluate implementation of 
                such elements by health care providers, 
                pharmacists, and other parties in the health 
                care system who are responsible for 
                implementing such elements; and
                  (B) work to improve implementation of such 
                elements by such persons.
          (5) Evaluation of elements to assure safe use.--The 
        Secretary, through the Drug Safety and Risk Management 
        Advisory Committee (or successor committee) or other 
        advisory committee of the Food and Drug Administration, 
        shall--
                  (A) seek input from patients, physicians, 
                pharmacists, and other health care providers 
                about how elements to assure safe use under 
                this subsection for 1 or more drugs may be 
                standardized so as not to be--
                          (i) unduly burdensome on patient 
                        access to the drug; and
                          (ii) to the extent practicable, 
                        minimize the burden on the health care 
                        delivery system;
                  (B) periodically evaluate, for 1 or more 
                drugs, the elements to assure safe use of such 
                drug to assess whether the elements--
                          (i) assure safe use of the drug;
                          (ii) are not unduly burdensome on 
                        patient access to the drug; and
                          (iii) to the extent practicable, 
                        minimize the burden on the health care 
                        delivery system; and
                  (C) considering such input and evaluations--
                          (i) issue or modify agency guidance 
                        about how to implement the requirements 
                        of this subsection; and
                          (ii) modify elements under this 
                        subsection for 1 or more drugs as 
                        appropriate.
          (6) Additional mechanisms to assure access.--The 
        mechanisms under section 561 to provide for expanded 
        access for patients with serious or life-threatening 
        diseases or conditions may be used to provide access 
        for patients with a serious or life-threatening disease 
        or condition, the treatment of which is not an approved 
        use for the drug, to a drug that is subject to elements 
        to assure safe use under this subsection. The Secretary 
        shall promulgate regulations for how a physician may 
        provide the drug under the mechanisms of section 561.
          (8) Limitation.--No holder of an approved covered 
        application shall use any element to assure safe use 
        required by the Secretary under this subsection to 
        block or delay approval of an application under section 
        505(b)(2) or (j) or to prevent application of such 
        element under subsection (i)(1)(B) to a drug that is 
        the subject of an abbreviated new drug application.
  (g) Assessment and Modification of Approved Strategy.--
          (1) Voluntary assessments.--After the approval of a 
        risk evaluation and mitigation strategy under 
        subsection (a), the responsible person involved may, 
        subject to paragraph (2), submit to the Secretary an 
        assessment of the approved strategy for the drug 
        involved at any time.
          (2) Required assessments.--A responsible person shall 
        submit an assessment of the approved risk evaluation 
        and mitigation strategy for a drug--
                  (A) when submitting a supplemental 
                application for a new indication for use under 
                section 505(b) or under section 351 of the 
                Public Health Service Act, unless the drug is 
                not subject to section 503(b) and the risk 
                evaluation and mitigation strategy for the drug 
                includes only the timetable under subsection 
                (d);
                  (B) when required by the strategy, as 
                provided for in such timetable under subsection 
                (d);
                  (C) within a time period to be determined by 
                the Secretary, if the Secretary, in 
                consultation with the offices described in 
                subsection (c)(2), determines that an 
                assessment is needed to evaluate whether the 
                approved strategy should be modified to--
                          (i) ensure the benefits of the drug 
                        outweigh the risks of the drug; or
                          (ii) minimize the burden on the 
                        health care delivery system of 
                        complying with the strategy.
          (3) Requirements for assessments.--An assessment 
        under paragraph (1) or (2) of an approved risk 
        evaluation and mitigation strategy for a drug shall 
        include, with respect to each goal included in the 
        strategy, an assessment of the extent to which the 
        approved strategy, including each element of the 
        strategy, is meeting the goal or whether 1 or more such 
        goals or such elements should be modified.
          (4) Modification.--
                  (A) On initiative of responsible person.--
                After the approval of a risk evaluation and 
                mitigation strategy by the Secretary, the 
                responsible person may, at any time, submit to 
                the Secretary a proposal to modify the approved 
                strategy. Such proposal may propose the 
                addition, modification, or removal of any goal 
                or element of the approved strategy and shall 
                include an adequate rationale to support such 
                proposed addition, modification, or removal of 
                any goal or element of the strategy.
                  (B) On initiative of secretary.--After the 
                approval of a risk evaluation and mitigation 
                strategy by the Secretary, the Secretary may, 
                at any time, require a responsible person to 
                submit a proposed modification to the strategy 
                within 120 days or within such reasonable time 
                as the Secretary specifies, if the Secretary, 
                in consultation with the offices described in 
                subsection (c)(2), determines that 1 or more 
                goals or elements should be added, modified, or 
                removed from the approved strategy to--
                          (i) ensure the benefits of the drug 
                        outweigh the risks of the drug; [or]
                          (ii) minimize the burden on the 
                        health care delivery system of 
                        complying with the strategy[.]; or
                          (iii) accommodate different, 
                        comparable approved risk evaluation and 
                        mitigation strategies for a drug that 
                        is the subject of an application under 
                        section 505(j), and the applicable 
                        listed drug.
  (h) Review of Proposed Strategies; Review of Assessments and 
Modifications of Approved Strategies.--
          (1) In general.--The Secretary, in consultation with 
        the offices described in subsection (c)(2), shall 
        promptly review each proposed risk evaluation and 
        mitigation strategy for a drug submitted under 
        subsection (a) and each assessment of and proposed 
        modification to an approved risk evaluation and 
        mitigation strategy for a drug submitted under 
        subsection (g), and, if necessary, promptly initiate 
        discussions with the responsible person about such 
        proposed strategy, assessment, or modification.
          (2) Action.--
                  (A) In general.--
                          (i) Timeframe.--Unless the dispute 
                        resolution process described under 
                        paragraph (3) or (4) applies, and, 
                        except as provided in clause (ii) or 
                        clause (iii) below, the Secretary, in 
                        consultation with the offices described 
                        in subsection (c)(2), shall review and 
                        act on the proposed risk evaluation and 
                        mitigation strategy for a drug or any 
                        proposed modification to any required 
                        strategy within 180 days of receipt of 
                        the proposed strategy or modification.
                          (ii) Minor modifications.--The 
                        Secretary shall review and act on a 
                        proposed minor modification, as defined 
                        by the Secretary in guidance, within 60 
                        days of receipt of such modification.
                          (iii) REMS modification due to safety 
                        labeling changes.--Not later than 60 
                        days after the Secretary receives a 
                        proposed modification to an approved 
                        risk evaluation and mitigation strategy 
                        to conform the strategy to approved 
                        safety labeling changes, including 
                        safety labeling changes initiated by 
                        the responsible person in accordance 
                        with FDA regulatory requirements, or to 
                        a safety labeling change that the 
                        Secretary has directed the holder of 
                        the application to make pursuant to 
                        section 505(o)(4), the Secretary shall 
                        review and act on such proposed 
                        modification to the approved strategy.
                          (iv) Guidance.--The Secretary shall 
                        establish, through guidance, that 
                        responsible persons may implement 
                        certain modifications to an approved 
                        risk evaluation and mitigation strategy 
                        following notification to the 
                        Secretary.
                  (B) Inaction.--An approved risk evaluation 
                and mitigation strategy shall remain in effect 
                until the Secretary acts, if the Secretary 
                fails to act as provided under subparagraph 
                (A).
                  (C) Public availability.--Upon acting on a 
                proposed risk evaluation and mitigation 
                strategy or proposed modification to a risk 
                evaluation and mitigation strategy under 
                subparagraph (A), the Secretary shall make 
                publicly available an action letter describing 
                the actions taken by the Secretary under such 
                subparagraph (A).
          (3) Dispute resolution at initial approval.--If a 
        proposed risk evaluation and mitigation strategy is 
        submitted under subsection (a)(1) in an application for 
        initial approval of a drug and there is a dispute about 
        the strategy, the responsible person shall use the 
        major dispute resolution procedures as set forth in the 
        letters described in section 101(c) of the Food and 
        Drug Administration Amendments Act of 2007.
          (4) Dispute resolution in all other cases.--
                  (A) Request for review.--
                          (i) In general.--The responsible 
                        person may, after the sponsor is 
                        required to make a submission under 
                        subsection (a)(2) or (g), request in 
                        writing that a dispute about the 
                        strategy be reviewed by the Drug Safety 
                        Oversight Board under subsection (j), 
                        except that the determination of the 
                        Secretary to require a risk evaluation 
                        and mitigation strategy is not subject 
                        to review under this paragraph. The 
                        preceding sentence does not prohibit 
                        review under this paragraph of the 
                        particular elements of such a strategy.
                          (ii) Scheduling.--Upon receipt of a 
                        request under clause (i), the Secretary 
                        shall schedule the dispute involved for 
                        review under subparagraph (B) and, not 
                        later than 5 business days of 
                        scheduling the dispute for review, 
                        shall publish by posting on the 
                        Internet or otherwise a notice that the 
                        dispute will be reviewed by the Drug 
                        Safety Oversight Board.
                  (B) Scheduling review.--If a responsible 
                person requests review under subparagraph (A), 
                the Secretary--
                          (i) shall schedule the dispute for 
                        review at 1 of the next 2 regular 
                        meetings of the Drug Safety Oversight 
                        Board, whichever meeting date is more 
                        practicable; or
                          (ii) may convene a special meeting of 
                        the Drug Safety Oversight Board to 
                        review the matter more promptly, 
                        including to meet an action deadline on 
                        an application (including a 
                        supplemental application).
                  (C) Agreement after discussion or 
                administrative appeals.--
                          (i) Further discussion or 
                        administrative appeals.--A request for 
                        review under subparagraph (A) shall not 
                        preclude further discussions to reach 
                        agreement on the risk evaluation and 
                        mitigation strategy, and such a request 
                        shall not preclude the use of 
                        administrative appeals within the Food 
                        and Drug Administration to reach 
                        agreement on the strategy, including 
                        appeals as described in the letters 
                        described in section 101(c) of the Food 
                        and Drug Administration Amendments Act 
                        of 2007 for procedural or scientific 
                        matters involving the review of human 
                        drug applications and supplemental 
                        applications that cannot be resolved at 
                        the divisional level. At the time a 
                        review has been scheduled under 
                        subparagraph (B) and notice of such 
                        review has been posted, the responsible 
                        person shall either withdraw the 
                        request under subparagraph (A) or 
                        terminate the use of such 
                        administrative appeals.
                          (ii) Agreement terminates dispute 
                        resolution.--At any time before a 
                        decision and order is issued under 
                        subparagraph (G), the Secretary (in 
                        consultation with the offices described 
                        in subsection (c)(2)) and the 
                        responsible person may reach an 
                        agreement on the risk evaluation and 
                        mitigation strategy through further 
                        discussion or administrative appeals, 
                        terminating the dispute resolution 
                        process, and the Secretary shall issue 
                        an action letter or order, as 
                        appropriate, that describes the 
                        strategy.
                  (D) Meeting of the board.--At a meeting of 
                the Drug Safety Oversight Board described in 
                subparagraph (B), the Board shall--
                          (i) hear from both parties via 
                        written or oral presentation; and
                          (ii) review the dispute.
                  (E) Record of proceedings.--The Secretary 
                shall ensure that the proceedings of any such 
                meeting are recorded, transcribed, and made 
                public within 90 days of the meeting. The 
                Secretary shall redact the transcript to 
                protect any trade secrets and other information 
                that is exempted from disclosure under section 
                552 of title 5, United States Code, or section 
                552a of title 5, United States Code.
                  (F) Recommendation of the board.--Not later 
                than 5 days after any such meeting, the Drug 
                Safety Oversight Board shall provide a written 
                recommendation on resolving the dispute to the 
                Secretary. Not later than 5 days after the 
                Board provides such written recommendation to 
                the Secretary, the Secretary shall make the 
                recommendation available to the public.
                  (G) Action by the secretary.--
                          (i) Action letter.--With respect to a 
                        proposal or assessment referred to in 
                        paragraph (1), the Secretary shall 
                        issue an action letter that resolves 
                        the dispute not later than the later 
                        of--
                                  (I) the action deadline for 
                                the action letter on the 
                                application; or
                                  (II) 7 days after receiving 
                                the recommendation of the Drug 
                                Safety Oversight Board.
                          (ii) Order.--With respect to an 
                        assessment of an approved risk 
                        evaluation and mitigation strategy 
                        under subsection (g)(1) or under any of 
                        subparagraphs (B) through (D) of 
                        subsection (g)(2), the Secretary shall 
                        issue an order, which shall be made 
                        public, that resolves the dispute not 
                        later than 7 days after receiving the 
                        recommendation of the Drug Safety 
                        Oversight Board.
                  (H) Inaction.--An approved risk evaluation 
                and mitigation strategy shall remain in effect 
                until the Secretary acts, if the Secretary 
                fails to act as provided for under subparagraph 
                (G).
                  (I) Effect on action deadline.--With respect 
                to a proposal or assessment referred to in 
                paragraph (1), the Secretary shall be 
                considered to have met the action deadline for 
                the action letter on the application if the 
                responsible person requests the dispute 
                resolution process described in this paragraph 
                and if the Secretary has complied with the 
                timing requirements of scheduling review by the 
                Drug Safety Oversight Board, providing a 
                written recommendation, and issuing an action 
                letter under subparagraphs (B), (F), and (G), 
                respectively.
                  (J) Disqualification.--No individual who is 
                an employee of the Food and Drug Administration 
                and who reviews a drug or who participated in 
                an administrative appeal under subparagraph 
                (C)(i) with respect to such drug may serve on 
                the Drug Safety Oversight Board at a meeting 
                under subparagraph (D) to review a dispute 
                about the risk evaluation and mitigation 
                strategy for such drug.
                  (K) Additional expertise.--The Drug Safety 
                Oversight Board may add members with relevant 
                expertise from the Food and Drug 
                Administration, including the Office of 
                Pediatrics, the Office of Women's Health, or 
                the Office of Rare Diseases, or from other 
                Federal public health or health care agencies, 
                for a meeting under subparagraph (D) of the 
                Drug Safety Oversight Board.
          (5) Use of advisory committees.--The Secretary may 
        convene a meeting of 1 or more advisory committees of 
        the Food and Drug Administration to--
                  (A) review a concern about the safety of a 
                drug or class of drugs, including before an 
                assessment of the risk evaluation and 
                mitigation strategy or strategies of such drug 
                or drugs is required to be submitted under 
                subparagraph (B) or (C) of subsection (g)(2);
                  (B) review the risk evaluation and mitigation 
                strategy or strategies of a drug or group of 
                drugs; or
                  (C) review a dispute under paragraph (3) or 
                (4).
          (6) Process for addressing drug class effects.--
                  (A) In general.--When a concern about a 
                serious risk of a drug may be related to the 
                pharmacological class of the drug, the 
                Secretary, in consultation with the offices 
                described in subsection (c)(2), may defer 
                assessments of the approved risk evaluation and 
                mitigation strategies for such drugs until the 
                Secretary has convened 1 or more public 
                meetings to consider possible responses to such 
                concern.
                  (B) Notice.--If the Secretary defers an 
                assessment under subparagraph (A), the 
                Secretary shall--
                          (i) give notice of the deferral to 
                        the holder of the approved covered 
                        application not later than 5 days after 
                        the deferral;
                          (ii) publish the deferral in the 
                        Federal Register; and
                          (iii) give notice to the public of 
                        any public meetings to be convened 
                        under subparagraph (A), including a 
                        description of the deferral.
                  (C) Public meetings.--Such public meetings 
                may include--
                          (i) 1 or more meetings of the 
                        responsible person for such drugs;
                          (ii) 1 or more meetings of 1 or more 
                        advisory committees of the Food and 
                        Drug Administration, as provided for 
                        under paragraph (6); or
                          (iii) 1 or more workshops of 
                        scientific experts and other 
                        stakeholders.
                  (D) Action.--After considering the 
                discussions from any meetings under 
                subparagraph (A), the Secretary may--
                          (i) announce in the Federal Register 
                        a planned regulatory action, including 
                        a modification to each risk evaluation 
                        and mitigation strategy, for drugs in 
                        the pharmacological class;
                          (ii) seek public comment about such 
                        action; and
                          (iii) after seeking such comment, 
                        issue an order addressing such 
                        regulatory action.
          (7) International coordination.--The Secretary, in 
        consultation with the offices described in subsection 
        (c)(2), may coordinate the timetable for submission of 
        assessments under subsection (d), or a study or 
        clinical trial under section 505(o)(3), with efforts to 
        identify and assess the serious risks of such drug by 
        the marketing authorities of other countries whose drug 
        approval and risk management processes the Secretary 
        deems comparable to the drug approval and risk 
        management processes of the United States. If the 
        Secretary takes action to coordinate such timetable, 
        the Secretary shall give notice to the responsible 
        person.
          (8) Effect.--Use of the processes described in 
        paragraphs (6) and (7) shall not be the sole source of 
        delay of action on an application or a supplement to an 
        application for a drug.
  (i) Abbreviated New Drug Applications.--
          (1) In general.--A drug that is the subject of an 
        abbreviated new drug application under section 505(j) 
        is subject to only the following elements of the risk 
        evaluation and mitigation strategy required under 
        subsection (a) for the applicable listed drug:
                  (A) A Medication Guide or patient package 
                insert, if required under subsection (e) for 
                the applicable listed drug.
                  (B) A packaging or disposal requirement, if 
                required under subsection (e)(4) for the 
                applicable listed drug.
                  [(C) Elements to assure safe use, if required 
                under subsection (f) for the listed drug. A 
                drug that is the subject of an abbreviated new 
                drug application and the listed drug shall use 
                a single, shared system under subsection (f). 
                The Secretary may waive the requirement under 
                the preceding sentence for a drug that is the 
                subject of an abbreviated new drug application, 
                and permit the applicant to use a different, 
                comparable aspect of the elements to assure 
                safe use, if the Secretary determines that--
                          [(i) the burden of creating a single, 
                        shared system outweighs the benefit of 
                        a single, system, taking into 
                        consideration the impact on health care 
                        providers, patients, the applicant for 
                        the abbreviated new drug application, 
                        and the holder of the reference drug 
                        product; or
                          [(ii) an aspect of the elements to 
                        assure safe use for the applicable 
                        listed drug is claimed by a patent that 
                        has not expired or is a method or 
                        process that, as a trade secret, is 
                        entitled to protection, and the 
                        applicant for the abbreviated new drug 
                        application certifies that it has 
                        sought a license for use of an aspect 
                        of the elements to assure safe use for 
                        the applicable listed drug and that it 
                        was unable to obtain a license.
                A certification under clause (ii) shall include 
                a description of the efforts made by the 
                applicant for the abbreviated new drug 
                application to obtain a license. In a case 
                described in clause (ii), the Secretary may 
                seek to negotiate a voluntary agreement with 
                the owner of the patent, method, or process for 
                a license under which the applicant for such 
                abbreviated new drug application may use an 
                aspect of the elements to assure safe use, if 
                required under subsection (f) for the 
                applicable listed drug, that is claimed by a 
                patent that has not expired or is a method or 
                process that as a trade secret is entitled to 
                protection.]
                  (C)(i) Elements to assure safe use, if 
                required under subsection (f) for the listed 
                drug, which, subject to clause (ii), for a drug 
                that is the subject of an application under 
                section 505(j) may use--
                          (I) a single, shared system with the 
                        listed drug under subsection (f); or
                          (II) a different, comparable aspect 
                        of the elements to assure safe use 
                        under subsection (f).
                  (ii) The Secretary may require a drug that is 
                the subject of an application under section 
                505(j) and the listed drug to use a single, 
                shared system under subsection (f), if the 
                Secretary determines that no different, 
                comparable aspect of the elements to assure 
                safe use could satisfy the requirements of 
                subsection (f).
          (2) Action by secretary.--For an applicable listed 
        drug for which a drug is approved under section 505(j), 
        the Secretary--
                  (A) shall undertake any communication plan to 
                health care providers required under subsection 
                (e)(3) for the applicable listed drug;
                  (B) shall permit packaging systems and safe 
                disposal packaging or safe disposal systems 
                that are different from those required for the 
                applicable listed drug under subsection (e)(4); 
                and
                  (C) shall inform the responsible person for 
                the drug that is so approved if the risk 
                evaluation and mitigation strategy for the 
                applicable listed drug is modified.
  (j) Drug Safety Oversight Board.--
          (1) In general.--There is established a Drug Safety 
        Oversight Board.
          (2) Composition; meetings.--The Drug Safety Oversight 
        Board shall--
                  (A) be composed of scientists and health care 
                practitioners appointed by the Secretary, each 
                of whom is an employee of the Federal 
                Government;
                  (B) include representatives from offices 
                throughout the Food and Drug Administration, 
                including the offices responsible for 
                postapproval safety of drugs;
                  (C) include at least 1 representative each 
                from the National Institutes of Health and the 
                Department of Health and Human Services (other 
                than the Food and Drug Administration);
                  (D) include such representatives as the 
                Secretary shall designate from other 
                appropriate agencies that wish to provide 
                representatives; and
                  (E) meet at least monthly to provide 
                oversight and advice to the Secretary on the 
                management of important drug safety issues.
  (k) Waiver in Public Health Emergencies.--The Secretary may 
waive any requirement of this section with respect to a 
qualified countermeasure (as defined in section 319F-1(a)(2) of 
the Public Health Service Act) to which a requirement under 
this section has been applied, if the Secretary determines that 
such waiver is required to mitigate the effects of, or reduce 
the severity of, the circumstances under which--
          (1) a determination described in subparagraph (A), 
        (B), or (C) of section 564(b)(1) has been made by the 
        Secretary of Homeland Security, the Secretary of 
        Defense, or the Secretary, respectively; or
          (2) the identification of a material threat described 
        in subparagraph (D) of section 564(b)(1) has been made 
        pursuant to section 319F-2 of the Public Health Service 
        Act.
  (l) Separate REMS.--When used in this section, the terms 
``different, comparable aspect of the elements to assure safe 
use'' or ``different, comparable approved risk evaluation and 
mitigation strategies'' means a risk evaluation and mitigation 
strategy for a drug that is the subject of an application under 
section 505(j) that uses different methods or operational means 
than the strategy required under subsection (a) for the 
applicable listed drug, or other application under section 
505(j) with the same such listed drug, but achieves the same 
level of safety as such strategy.

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