Lawmakers Should Oppose the CREATES Act

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Posted by Alexander Hendrie on Friday, November 11th, 2016, 9:00 AM PERMALINK

Before the end of the year, Congress is expected to consider S. 3056, the “Creating and Restoring Equal Access to Equivalent Samples Act” (CREATES Act) as a pay-for in H.R.6, the 21st Century Cures Act. While the intent of the CREATES Act is to streamline the system of medical innovation, it would ultimately cause more problems than it would solve. The legislation would cause severe damage to a regulatory system that ensures the safe development of life-saving and life-preserving medicines. It should be opposed by all members of Congress.

The CREATES Act modifies an FDA regulatory process known as Risk Evaluation and Mitigation Strategies (REMS). This process applies to a small set of potentially dangerous drugs and is carefully balanced to promote safety, innovation, and access. This flawed legislation would upend this system in a reckless way that undermines these principles.

If passed into law, the CREATES Act would endanger patient and researcher safety, undermine intellectual property rights protections, open the door to unjustified litigation, and suppress innovation. 

Undermines Intellectual Property Rights: Patent exclusivity has been carefully enshrined in law to ensure that creativity, innovation, and medical growth are not undermined. It is also not unlimited or unreasonable in length because doing so would allow the creation of a monopoly and limit access to medicines at reasonable prices.

The CREATES Act creates a new litigation system with the aim of ensuring bad actors do not abuse the regulatory system to extend patent protection. However, it does so in a backwards way that gives generics the power to force innovators to hand over their IP at threat of litigation.

While supporters of the legislation argue that billions could be saved by modifying the regulatory process, this would come at the cost of suppress innovation, resulting in the slowed development of innovative new medicines and higher long-term costs.

Upends a Carefully Balanced, Working Regulatory System: REMS is a special regulatory process that affects a small set of about 40 highly advanced, yet potential dangerous drugs. This process is necessary because of the volatile nature of these medicines, and ensures they are efficiently developed and administered in a way that carefully balances property rights, safety, and access.

The CREATES Act upends this system by allowing generics to bypass FDA procedures that exist to ensure REMS medicines are safely developed. Under the proposal, a generic manufacturer is not required to include adequate safeguards for patients and researchers as a condition of authorization, and FDA is limited in its ability to deny or modify an authorization request.

Opens Door to Unjustified Litigation: If enacted into law, the CREATES Act would open the door to bad actors in the industry launching petty, unjustified litigation. This would be a handout to monied trial lawyers at the expense of innovators, consumers, and the broader healthcare system.

This legislation creates a new litigation system that leaves allows competitors seeking samples from an innovator the ability to launch litigation just 30 days after negotiation has begun --  essentially forcing innovators to hand over their IP or go to court. At its most extreme, the legislation’s lack of protections may even leave innovators responsible for actions taken by a reckless generic competitor.

Not the Solution to Lower Drug Prices: Supporters of the legislation, like Senator Patrick Leahy (D-Vt.) claim that the CREATES Act is a solution to high price of medicines. If anything this proposal would do the opposite – increase the price of medicines by creating a more burdensome, litigious regulatory system.

Costs associated with medical development are already significant. On average it costs $2.6 billion and more than a decade of research time for each new medicine that hits the market. By opening the door to more litigation in a way that shifts the burden onto innovators, the CREATES Act will undoubtedly increase these costs. 

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