FAST Generics Act Would Amend the FDC Act to Address REMS/Restricted Access Programs and Biostudy Sample Availability

By Kurt R. Karst –      

There have been rumors floating around Washington, DC for a few months that efforts were afoot to introduce legislation to amend the FDC Act to address the availability of products subject to a restricted distribution program to generic drug and biosimilar manufacturers for purposes of conducting studies necessary to pursue approval of a marketing application.  Those rumors turned into reality with the September 18th introduction of H.R. 5657, the Fair Access for Safe and Timely Generics Act of 2014 (“FAST Generics Act”).  Introduced in the U.S. House of Representatives by Congressmen Steve Stivers (R-OH) and Peter Welch (D-VT), the bill would “increase consumer access to generic drugs, boost market competition and ultimately save consumers money,” according to a press release announcing the introduction of the FAST Generics Act.  The Generic Pharmaceutical Association, which sponsored a paper published in July 2014 on restricted distribution programs and generic drug competition, applauded the introduction of the bill in a press release.

In case you’re not familiar with the topic of the FAST Generics Act, the issue concerns drug and biological products covered by restricted distribution programs – either under a Risk Evaluation and Mitigation Strategies (“REMS”) program with Elements To Assure Safe Use (“ETASU”) under FDC Act § 505-1, or under a restricted distribution program adopted and implemented by a brand-name manufacturer.  In most cases, in order for a generic drug (or biosimilar) manufacturer to submit a marketing application to FDA, the company must first conduct studies comparing its proposed product to the brand-name reference product.  In order to do so, the generic drug manufacturer must first obtain reference product sample.  Normally drug product sample is easily obtained through various market channels.  Products under a restricted distribution program, however, are tightly controlled (often because of a safety concern) and are not readily available.  If a generic drug sponsor is unable to obtain sample for equivalence testing, then it is unable to seek marketing approval from FDA.

Current law states that “[n]o holder of an approved covered application shall use any element to assure safe use required by [FDA] under [FDC Act § 505-1(f)] to block or delay approval of an application under section 505(b)(2) or (j) or to prevent application of such element under [FDC Act § 505-1(i)(1)(B)] to a drug that is the subject of an [ANDA].”  In June 2009, Dr. Reddy’s Laboratories, Inc. submitted a Citizen Petition (Docket No. FDA-2009-P-0266) to FDA requesting that the Agency “establish procedures to facilitate the availability of generic versions of drug products subject to a [REMS] and enforce the FDC Act to prevent companies from using REMS to block or delay generic competition.”  FDA responded to the petition in August 2013 saying, among other things, that decisions to take enforcement action are made at the Agency’s discretion on a case-by-case basis and that FDA “agrees that issues related to ensuring that marketplace actions are fair and do not block market competition would be best addressed by the FTC,” to which FDA has been referring complaints related to restricted distribution programs. 

In 2012, as Congress was considering legislation that was ultimately enacted as the FDA Safety and Innovation Act (“FDASIA”), there was a push to amend the law to address REMS and generic competition.  Specifically Section 1131 of Senate-passed S. 3187 would have amended FDC Act § 505-1 to state that:

Notwithstanding any other provision of law, if a drug is a covered drug, no elements to ensure safe use shall prohibit, or be construed or applied to prohibit, supply of such drug to any eligible drug developer for the purpose of conducting testing necessary to support an application under [FDC Act § (b)(2) or § 505(j) or PHS Act § 351(k)] if the Secretary has issued a written notice described in paragraph (2), and the eligible drug developer has agreed to comply with the terms of the notice.

That provision was not enacted as part of FDASIA.  As one legislative bulletin issued at the time stated, “[s]ome controversy surrounded this provision since it could have [led] to the FDA forcing drug sales between brand and generic manufacturers.”  In addition, then-FTC Commissioner J. Thomas Rosch objected to including the provision in FDASIA.  Referring to both REMS legislation advocated by FTC staff that would “give the FTC jurisdiction to challenge the refusal of a pioneer drug company to provide product samples to generic manufacturers if the FDA determined that the generic company’s protocols were safe,” and to the REMS provisions in S. 3187, Commissioner Rosch commented that “[n]either proposal should be tacked on to other legislation on the Senate floor and should instead be considered by the Help Committee on their own merits” (see our previous post here). 

Meanwhile, issues concerning ETASU REMS, restricted distribution programs, and generic competition were being debated in court in the context of antitrust law (see our previous posts here, here, and here).  None of the earlier court challenges resulted in a decision, because the cases were settled.  Earlier this year, however, Mylan Pharmaceuticals Inc. filed a lawsuit alleging that Celgene Corporation violated federal and state antitrust laws by preventing generic competition for Celgene’s drug products THALOMID (thalidomide) Capsules and REVLIMID (lenalidomide) Capsules (see our previous post here).  That case is still pending, with a Motion to Dismiss filed by Celgene (Opposition and Reply briefs are available here and here).

The 17-page FAST Generics Act would amend the FDC Act to add Section 505-2, titled “Competitive Access to Covered Products for Development Purposes.”  Proposed FDC Act § 505-2 would add several provisions, including:

(b) COMPETITIVE ACCESS TO COVERED PRODUCTS AS A CONDITION ON APPROVAL OR LICENSING.—As a condition of approval or licensure, or continuation or renewal of approval or licensure, of a covered product under section 505 of this Act or section 351 of the Public Health Service Act, respectively, the Secretary shall require that the covered product’s license holder not adopt, impose, or enforce any condition relating to the sale, resale, or distribution of the covered product, including any condition adopted, imposed, or enforced as an aspect of a risk evaluation and mitigation strategy approved by the Secretary, that restricts or has the effect of restricting the supply of such covered product to an eligible product developer for development or testing purposes. 

(c) COMPETITIVE ACCESS TO COVERED PRODUCTS OTHER THAN REMS PRODUCTS FOR DEVELOPMENT PURPOSES.—No license holder shall adopt, impose, or enforce any condition relating to the sale, resale, or distribution of a covered product that interferes with or restricts access to reasonable quantities of a covered product by an eligible product developer for development and testing purposes, at commercially reasonable, market-based prices, from the license holder or from any wholesaler or specialty distributor authorized by the license holder to commercially distribute or sell the covered product unless the license holder generally adopts, imposes, or enforces lawful conditions relating to the sale, resale, or distribution of a covered product, with respect to other buyers of the covered product.

(d) COMPETITIVE ACCESS TO REMS PRODUCTSFOR DEVELOPMENT PURPOSES.—

(1) PROHIBITED USE OF REMS TO RESTRICTACCESS.—With respect to a REMS product, no aspect of a risk evaluation and mitigation strategy under section 505–1 shall prohibit or restrict, or be construed or applied to prohibit or restrict, the supply of such REMS product to an eligible product developer for development and testing purposes, at commercially reasonable, market-based prices, from the REMS product’s license holder or from any wholesaler or specialty distributor authorized by the license holder to commercially distribute or sell the REMS product.

(2) SINGLE, SHARED SYSTEM OF ELEMENTS TO ASSURE SAFE USE.—With respect to a REMS product, no license holder shall take any step that impedes—

(A) the prompt development of a single, shared system of elements to assure safe use under section 505–1; or

(B) the entry on commercially reasonable terms of an eligible product developer into a previously approved system of elements to assure safe use.

(e) PROCEDURES FOR OBTAINING ACCESS TO COVERED PRODUCTS.—

(1) COMPETITIVE ACCESS.—Notwithstanding any other provision of law, in the case of an eligible product developer that has an authorization to obtain a covered product in effect . . . , no license holder shall adopt, impose, or enforce any other condition relating to the sale, resale, or distribution of such covered product that interferes with or restricts access to reasonable quantities of the covered product by the eligible product developer for development and testing purposes, at commercially reasonable, market-based prices, from the license holder or from any wholesaler or specialty distributor authorized by the license holder to commercially distribute or sell the covered product, unless the license holder generally adopts, imposes, or enforces lawful conditions relating to the sale, resale, or distribution of a covered product, with respect to other buyers of the covered product.

A violation of a requirement or prohibition in any of the above-proposed sections would be treated, in the case of a REMS product, as a violation of the product’s REMS, and would be a prohibited act under proposed FDC Act § 301(ddd).  Also, an “eligible product developer” (i.e., a person seeking to develop an ANDA, 505(b)(2) application, or a BLA) that has authorization for access to a covered product from FDA and that is aggrieved by a violation of one of the above-proposed sections “by a license holder or any wholesaler or specialty distributor authorized by the license holder to commercially distribute or sell the covered product[,] may sue such license holder for injunctive relief and treble damages (including costs and interest of the kind described in section 4(a) of the Clayton Act (15 U.S.C. 15(a)).”

In addition to laying out the procedures for an interested party to obtain an authorization to procure a covered product, the FAST Generics Act would give FDA the authority to prohibit, limit, or otherwise suspend a transfer of a covered product to an eligible product developer because such transfer would present an imminent hazard to the public health, and would shield NDA and BLA holders from liability for any claim arising out of an eligible product developer’s development or testing activities conducted under proposed FDC Act § 505-2, “including a claim arising out of a failure of the eligible drug developer to follow adequate safeguards to assure safe use of the covered product.”

Finally, the bill would require various reports from FDA and from the FTC on the implementation of proposed FDC Act § 505-2, and would amend FDC Act § 505-1(i)(1)(B) concerning waiver of the single, shared REMS requirement (see our previous post here).  If enacted, the bill would apply to all NDAs and BLAs, regardless of whether or not those applications were approved before, on, or after the date of enactment of the FAST Generics Act.