When does the CREATES Act “clock” start?

A license holder has 31 days from the date it receives a CREATES Act request to deliver the requested samples (21 USC 355-2(b)(2)(A)(iv)(I)). However, to prevail in a civil action brought under the Act, a generic manufacturer must demonstrate they submitted a written request fulfilling the statutory requirements of the Act (21 USC 355-2(b)(2)(A)(iii)). The 31-day “clock” does not start until the license holder receives a request meeting those requirements.

A valid CREATES request must be sent by certified or registered mail. Requests are often sent with courtesy copies via email, but the license holder’s obligations do not start until the written request is physically received.

The request must also be sent to a named corporate officer of the license holder, identify an individual point of contact to whom the license holder should direct communications related to the request, and specify a valid mailing address to which the requested product is to be shipped. Requests that do not include these required elements can be rejected.

When does a license holder need to respond?

Aside from the 31-day deadline to deliver samples of covered products following a valid request, the CREATES Act does not impose any deadlines on license holders to respond. However, an affirmative defense is available to license holders that make a qualifying offer in response to a CREATES request within 14 days if the requester fails to accept the offer within 7 days. Thus, it is best practice to respond to any request within 14 days.

With this deadline in mind, companies should ensure personnel in sales, production, operations, regulatory, and legal roles are equipped to receive and timely route CREATES communications to the appropriate channels. License holders should ensure mail rooms at corporate offices are aware of CREATES requests so the requests can be appropriately triaged.

Is the request from an “eligible product developer”?

The CREATES Act permits an “eligible product developer” to request samples of product from a license holder. As defined, an “eligible product developer” is “a person that seeks to develop a product for approval pursuant to an application for approval under subsection (b)(2) or (j) of section 355 of [the FDCA] or for licensing pursuant to an application under section 262(k) of [the Public Health Services Act].”

Requests may come in from parties other than the entity seeking to develop a generic drug product. For example, an entity may send a CREATES Act request to obtain samples on behalf of an unnamed third party. After receiving such a request, consider whether the requesting entity is itself an eligible product developer or whether it is acting on behalf of one. If the latter, the eligible product developer seeking to ultimately obtain the samples should validate the authority of the agent to send the request on its behalf. The Act is written specifically for product developers who intend to submit generic drug applications or 505(b)(2) new drug application; it does not appear to permit warehousing of product or allow middlemen to stock their shelves in anticipation of a future need of a product developer.

Does the request implicate other legal requirements for the license holder?

The CREATES Act was enacted in part to respond to the use of restricted distribution systems, e.g., Risk Evaluation and Mitigation Strategies (REMS), as means to deny generic developers access to brand drugs. The Act expressly addresses this issue by allowing a requester to seek written authorization from the Secretary of Health and Human Services to receive the product subject to a REMS.

The Act does not address scenarios in which a product is subject to non-REMS restrictions on distribution. For example, the Controlled Substances Act only permits entities properly registered with DEA to receive and handle controlled substances. Also, certain radiopharmaceuticals may only be shipped to facilities properly licensed to handle radioactive materials.

License holders are required to provide samples of products on “commercially reasonable, market-based terms” without imposing any “additional conditions” on the sale (21 USC 355-2(a)(1)). License holders should consider their non-CREATES legal obligations regarding the distribution or marketing of requested drug products.

Of note: License holders are not liable for any claims arising out of the failure of a requester to appropriately use the product during testing. These provisions obviate the need for adopting clinical supply or pharmacovigilance agreements under the Act.

What happens if a license holder fails to fulfill a CREATES Act request?

The private right of action established under CREATES is a strong tool for enforcement. Under broadly defined terms of the Act, a court will order a license holder to provide the requested quantities of the product and award attorneys fees and costs for the civil action. Further, if a court finds a license holder has unduly delayed providing the requested quantities “without a legitimate business justification,” it will award to the requester a “monetary amount sufficient to deter the license holder from failing to provide” the requested quantity of drug product on the statutorily defined terms. License holders should carefully consider any business reasons for denying a valid CREATES request, such as shortage of supply or significant manufacturing issues.

Conclusion

Responding effectively to CREATES requests requires strategic and organized coordination from innovator pharmaceutical and biotechnology companies. With only one case publicly litigated under the Act and a dearth of guidance from FDA, the correct path forward under the threat of litigation is not always clear. Using the considerations above, companies can help build strategic and organized plans to respond.

If you have questions about the CREATES Act, please reach out to Lynn Mehler (lynn.mehler@hoganlovells.com) or Will Tenbarge (will.tenbarge@hoganlovells.com).