In an effort to clear a hurdle to outcomes- and other forms of value-based contracts, and to help payers prepare for new products, FDA Tuesday issued new guidance on healthcare economic information. The guidance creates a broad safe harbor for drug and device manufacturers to communicate truthful, non-misleading information to payers about data that is not on a product’s label, and about unapproved products.
The Health Care Economic Information guidance applies to communications with public and private sector payers, as well as formulary committees, PBMs, technology assessment groups, and similar organizations. It does not apply to communications with patients, the public, or physicians who prescribe drugs for individual patients and who are not involved in making coverage and reimbursement decisions.
FDA issued a separate guidance Tuesday about communication of information that is consistent with, but is not contained in a product’s label. This guidance applies to communications intended for physicians and the public (see BioCentury Extra, June 12).
The economic information guidance is part of a broader effort by HHS to facilitate a shift to value-based pricing, FDA Commissioner Scott Gottlieb said. The goal, he wrote, is to allow prices to “adjust to reflect the value in how medicines are prescribed and the outcomes they deliver, to control rising spending and reduce the burden of drug costs for consumers.”
This can be achieved, according to Gottlieb, through business models in which drug prices are linked to their usefulness in a specific clinical setting. “We want to encourage competitive contracting based on measures of value that matter most to purchasers and patients; not get in the way of these competitive negotiations.”
The guidance replaces a draft guidance that was developed under the Obama administration and released in January 2017. Major changes include extending the safe harbor for communications about unapproved drugs to also include medical devices, and applying it to unapproved uses of approved/cleared medical products.
The idea behind the guidance is that companies possess and can generate data that is not listed on FDA-approved labels that can inform better payment decisions, and that the public can benefit from better-informed payment decisions. It is also predicated on the idea that information provided to payers doesn’t have to be as carefully policed as material made publicly available because payers and related organizations have the knowledge and resources needed to put data into context.
Under the guidance, manufacturers can only provide healthcare economic information to payers and similar entities if it “relates to an approved indication.” For example, a drug company could provide data about 12 months of use of a drug approved for chronic use even if the label provides data about 24-week studies. They could not provide data about use of a drug for an unrelated indication.
Examples of the kinds of information that manufacturers can provide under the safe harbor include analyses derived from studies of the economic consequences of a disease, such as work days lost; the effect of a treatment on length of hospital stay; and calculations of measures such as quality-adjusted life year (QALY).
The guidance requires that healthcare economic information be based on competent and reliable scientific evidence, and provides examples of how manufacturers can meet this standard.