In an effort to curb prescription drug prices and reimbursement, some legislators are taking a more targeted strategy by looking to lower the cost of clinical research and drug development. To address the complaints that biopharmaceutical companies make it difficult and expensive for competitors to obtain marketed drugs needed to conduct subsequent clinical trials, members of both the U.S. House of Representatives and the U.S. Senate introduced the Discounted Drugs for Clinical Trials Act[1] (Clinical Trials Act ) on April 7, 2022. This would amend the Federal Food Drug & Cosmetic Act (FDC Act)[2] to increase access to certain pharmaceutical products for qualified research purposes. The bill was prompted by industry-wide anti-competitive practices and comparator sourcing issues aimed at preventing head-to-head clinical trials. The bill effectively closes certain loopholes in the 2019 Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act, which applied to generic drug samples for bioavailability studies.
Under the Clinical Trials Act, a qualified researcher would be able to purchase an eligible drug, biologic or combination product at a price no higher than its direct cost to manufacture. Eligible drugs include all covered Medicare Part D drugs that may be placed on a specialty tier or whose cost is determined by the Secretary of HHS to be prohibitive to the advancement of qualified research as well as any drugs approved under §505(c) of the FDC Act or biological product licensed under 351(a) of the Public Health Service (PHS) Act. Qualified research is defined as research in furtherance of an application under §505 (c) or (j) or 351 (a) or (c) of the PHS Act or research using an FDA approved drug for an approved indication with the purpose of evaluating and comparing the clinical effectiveness, risks, or benefits of two or more drugs.
Researchers would be required to submit an application of the Secretary of HHS and, if approved, an order would be issued for the researcher to provide to the manufacturer or license holder. Manufacturers would then be required to offer the product at discounted prices within 31 days of receiving the order. Researchers would then have 14 days to accept that offer. Researchers can bring civil action for failure to provide the eligible product. Available remedies include costs of the litigation, attorney fees and significant monetary penalties. Affirmative defenses include the ability to readily obtain the product from a wholesaler.
The bill is one of three introduced to strengthen competition and promote innovation, aimed at making drugs more affordable. The “Generic Substitution Non-Interference Act” would block anticompetitive practices employed to promote “dispense as written” or “DAW” prescriptions. The “Pharmaceutical Research & Transparency Act of 2022” would increase SEC reporting requirements for certain types of R&D costs.
Whether you are a niche CRO or a large generic drug manufacturer, our Government Affairs/FDA/IP attorneys have the knowledge and background to assist your clinical research needs. Those interested in these bills or the development of other model legislation in the pharmaceutical/clinical trial arena should contact Frier Levitt and speak to one of our attorneys.
[1] Introduced in the Senate on 4/07/2022 S. 4026 and companion bill S. 4053.
[2] 21 U.S.C. 351 et seq.
