FDA Commissioner Highlights Agency's Steps Toward Value-Based Healthcare

By Akia Thorpe -

June 13, 2018

US Food and Drug Administration (FDA) Commissioner Scott Gottlieb has outlined steps the agency is taking to advance value-based healthcare by advancing medical product communications through the issuance of two final guidance documents.

The guidances follow the announcement last month (May 2018) by Alex Azar, the Secretary of the Department of Health and Human Services, of a blueprint to lower drug price and reduce out-of-pocket costs for consumers. Among the new steps in the blueprint, the HHS highlighted the importance of linking payments for drugs to their value and committed to removing regulatory obstacles to value-based purchasing by payors.

“This call to action is taking place against the backdrop of an information transformation. In the era of ‘Big Data,’ scientists, drug makers, regulators, payors, and others have unprecedented access to new sources of information,” said Gottlieb in a June 12, 2018 agency statement.  “Already, the ability to harness this information and use it to help establish the value of medicines is providing the foundation for a shift toward innovative, value-based payment arrangements. The Food and Drug Administration, working, with our sister agencies in the Department of Health and Human Services, can help nurture this change by providing clear guidance to pharmaceutical companies about open, responsible communication with payors, formulary committees and others.”

The first guidance informs market participants developing contracts that include value-based arrangements how to communicate information about how a drug might impact outcomes that are important to purchasers, such as a health plan or hospital, but which is not an endpoint that is expressly described in a drug’s approved labeling.

“The blueprint put forward by HHS advances an important principle around these relationships: that prices should be able 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,” said Gottlieb in the agency statement. “To achieve these goals, selling models should be able to tie the price of drugs more closely to the usefulness of the clinical setting in which they are prescribed. 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 first guidance, Drug and Device Manufacturer Communications with Payors, Formulary Committees, and Similar Entities—Questions and Answers, answers common questions about companies’ communications to payors, including insurance companies, formulary committees, and similar entities. The guidance includes recommendations that the FDA says are designed to enable truthful, non-misleading and appropriate company communications with insurers across a product’s lifecycle. The goal is to advance public health benefits such as increased cost savings from informed and appropriate coverage and reimbursement decisions, says the FDA.  

“…[I]t’s our belief that giving companies clear guidelines for providing payors with truthful and non-misleading information about unapproved products and unapproved uses of approved or cleared products will help facilitate communications that can allow payors to provide coverage for these new products and new uses more quickly after FDA approval or clearance,” Gottlieb said in the June statement. “And our hope is that these communications can also help companies and payors establish pricing structures that benefit patients as well as health plans.”

The second guidance, Medical Product Communications That Are Consistent With the FDA-Required Labeling, provides the FDA’s views on manufacturers’ communication of information that is not contained in FDA-required labeling for their products, but that is consistent with that labeling. The FDA-required labeling is the primary tool that communicates the essential information needed for the safe and effective use of a medical product and as such, the labeling is subject to content requirements and limitations to help ensure that it effectively communicates information.

“Sometimes payors also want this information to inform purchase decisions, or to serve as the basis for value-based contracts where reimbursement may hinge on measures of benefit that aren’t expressly described in the drug’s label,” Gottlieb said in his statement. “This might include, for example, information about the time of onset of action of a product, or about patient compliance or adherence.”

The guidance is designed to provide clarity on what types of information are considered consistent with FDA-required labeling and how the FDA recommends companies to communicate this information in a truthful and non-misleading way. The guidance also explains that the FDA does not intend to rely on communications that are consistent with the FDA-required labeling to establish a new intended use.

Source: FDA