The Pharmaceutical Corner

The new CREATES Act is likely to spawn a wave of litigation between branded and generic pharmaceutical companies over the scope of the obligations imposed on branded companies. And, generic pharmaceutical companies are likely to test how much they can demand. The first lawsuit testing the Act’s reach has now been filed. 

Last month, Teva Pharmaceuticals sued Amicus Therapeutics in the Eastern District of Pennsylvania alleging that Amicus violated the CREATES Act.  See Dkt. No. 1, Case No. 2:21-cv-03105 (E.D. Pa., filed July 13, 2021). Teva complains that Amicus refused to provide access to “sufficient quantities” of its GALAFOLD product to Teva, which Teva contends it needed to support its ANDA application. This new case seeks to resolve (1) the meaning of the term “sufficient quantities” as used in the Act; and (2) which party determines whether the quantities requested or provided are “sufficient.”

The CREATES Act and the litigation it authorizes

The Creating and Restoring Equal Access to Equivalent Samples Act, codified at 21 U.S.C. § 355-2, was enacted in December 2019 to allow generic product developers to obtain samples of branded products. Generic developers need access to the branded products in order to conduct required bioequivalence and analytical testing. This testing data must often be included in the generic developer’s ANDA application.

Under the CREATES Act, a generic developer sends a request to the brand company for “sufficient quantities” of the branded product. The CREATES Act defines “sufficient quantities” as “an amount of a covered product that the eligible product developer determines allows it to (A) conduct testing to support an application . . . and (B) fulfill any regulatory requirements relating to approval of such an application.” 21 U.S.C. § 355-2(a)(10). Therefore, the CREATES Act allows a generic developer to request the amount of branded product that it deems necessary for its testing. The Act does not further quantify the “sufficient quantities” that the generic developer is able to request.

If a brand company refuses to sell product samples to a requesting generic developer within 31 days of receiving a request, the generic developer can sue to compel the sale of samples and to receive “a monetary amount sufficient to deter the license holder from failing to provide eligible product developers with sufficient quantities of a covered product,” as well as attorney’s fees and costs.

The facts in the CREATES Act dispute between Teva and Amicus

The dispute between Teva and Amicus began on August 5, 2020, when Teva sent Amicus a CREATES Act request to purchase two wallet packs of GALAFOLD. Amicus did not supply the requested GALAFOLD until April 27, 2021 (long after the prescribed 31-day time period under the CREATES Act). Teva sent a second CREATES Act letter on March 29, 2021 to request an additional 25 wallet packs of GALAFOLD. Teva alleged that the additional 25 packs were needed to conduct analytical and bioequivalence testing. According to Teva, the amount it requested was supported by the FDA’s assessment of the amount of drug product that is typically needed for bioequivalence testing. Teva did not explain why it did not request a larger number of packs in its first request, or the delay between its first and second requests.

Amicus refused to sell the additional 25 packs to Teva, and instead offered to sell it only two additional packs. As a result, Teva filed its complaint seeking (1) a judgment that Amicus failed to provide “sufficient quantities” of GALAFOLD; (2) an order directing Amicus to sell Teva “sufficient quantities” of GALAFOLD; (3) an award of attorney’s fees and costs; and (4) a monetary amount to deter future refusals to sell by Amicus.

What to look for

This first CREATES Act complaint will likely be followed by more complaints testing the limits of the Act, including whether generic pharmaceutical companies have unlimited discretion to quantify “sufficient quantities.”

Amicus’s answer will likely seek to place some limit on the term “sufficient quantities,” and Amicus will likely argue that reasonable limits must be placed on the quantity requested to conduct the necessary testing to file an ANDA application. Important issues to look for in any decision in this case will be (i) how to determine what constitutes “sufficient quantities”; (ii) what role the brand company has in determining what constitutes “sufficient quantities”; (iii) whether brand companies and generic producers are expected to conduct negotiations on what constitutes “sufficient quantities” when disagreements arise; (iv) how many times a generic producer may request samples from a brand company; and (v) whether a court can define or set a reasonableness standard for “sufficient quantities.”

Future CREATES Act cases will likely test what ancillary materials a generic producer can request under the CREATES Act, due to ambiguity in the Act’s definition of “covered product.” A “covered product” is (i) any drug approved under certain subsections of section 355 or biological product under certain subsections of section 262; (ii) any combination of a drug or biological product in (i); or (iii) any product, including a device, that is marketed or intended for use with a drug or biological product. 21 U.S.C. § 355-2(a)(2)(A). In particular, the terms “marketed” and “intended for use” in (iii) raise questions regarding whether commodity products used to administer a drug, such as vials or syringes, may be demanded.

Finally, the CREATES Act establishes affirmative defenses for brand companies, including an affirmative defense providing that, if a brand company offers a sufficient quantity of a covered product to the generic company 14 days after the request was received, and if the generic developer does not accept this offer within 7 days, then the brand company has an affirmative defense. The application of this affirmative defense requires resolution of some of the same questions discussed above, including the meaning of “sufficient quantities,” and how parties should resolve disputes regarding “sufficient quantities.”

This first CREATES Act case should provide some clarity regarding the meaning of some terms in the Act, and particularly, regarding the scope of brand companies’ obligations to supply product to ANDA filers.