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Chairman Nadler Statement for the Markup of H.R. 965, the CREATES Act

Apr 30, 2019

Washington, D.C. –Today, House Judiciary Committee Chairman Jerrold Nadler (D-NY) delivered the following opening statement for the markup of H.R. 965, the Creating and Restoring Equal Access to Equivalent Samples Act of 2019 (CREATES Act):

 

“H.R. 965, the ‘Creating and Restoring Equal Access to Equivalent Samples Act of 2019,’ or the ‘CREATES Act,’ is bipartisan legislation that would substantially lower drug prices by making it easier for generic pharmaceutical companies to obtain drug samples from branded companies, which they require in order to perform testing necessary to enter the market.

 

“One of the anticompetitive tactics that many branded drug companies employ to keep lower-cost generics off the shelf is to refuse to provide samples of their drugs to generic and biosimilar competitors.  The branded companies argue that FDA-imposed safety measures prevent them from giving samples to generic companies, claiming that the generics cannot follow the required safety protocols.  But, in many cases, this appears to be nothing more than gamesmanship designed to prolong the branded companies’ monopoly power.

 

“This plainly anti-competitive behavior perpetuates the branded company’s monopoly over the drug, enabling it to charge excessive prices.  These higher prices cost patients and taxpayers billions of dollars in unnecessary spending and, perhaps most importantly, they lead some patients, who cannot afford such high prices, to forego the use of prescription drugs altogether, placing their health in jeopardy.

 

“The CREATES Act ends this abusive delay tactic by providing generic and biosimilar competitors with tailored relief to obtain samples necessary to enter the market.  Furthermore, in cases where the brand-name drug company has no legitimate business justification for withholding samples from a generic competitor, the bill also includes a civil penalty.

 

“The Subcommittee on Antitrust, Commercial, and Administrative Law held a hearing in March on competition in the healthcare marketplace. During this hearing, several bipartisan witnesses testified in strong support for the CREATES Act, noting that it would significantly reduce drug prices and create competition where there is none today.

 

“For example, Minority witness Dr. Craig Garthwaite of Northwestern University testified that the CREATES Act is ‘an attractive piece of legislation that should be passed at the earliest opportunity.’

 

“Michael Kades, a leading antitrust practitioner with the Washington Center for Equitable Growth, similarly testified that the CREATES Act ‘would stop both sample blockades and safety protocol filibusters, which delay competition with no countervailing benefit.’

 

“This legislation would preserve important safety measures while ensuring that lower-priced generic competition that benefits consumers is not unreasonably delayed from entering the market.

 

“Accordingly, I thank the gentleman from Rhode Island, Subcommittee Chairman Cicilline, and the gentleman from Wisconsin, Subcommittee Ranking Member Sensenbrenner, for their leadership on this critical issue, and I urge my colleagues to support this important, bipartisan legislation.”

 

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116th Congress