New legislation would allow drug companies more flexibility in how they communicate health economic information to health plans.
New legislation that reforms section 114 of the Food and Drug Administration Modernization Act of 1997 would allow drug companies more flexibility to promote information from real-world data studies to health plans, explained Peter J. Neumann, ScD, director of the Center for the Evaluation of Value and Risk in Health at the Institute for Clinical Research and Health Policy Studies at Tufts Medical Center.
He discussed the proposed changes during an interview at the ISPOR 20th Annual International Meeting.
AJMC: Can you explain Section 114 of the Food and Drug Administration Modernization Act of 1997 and how it applies to pharmaceutical companies’ communications with health plans about health economic information?
PN: Section 114 is a legislative change that speaks to how drug companies can communicate health economic information to formulary committees. And it changed the standard of evidence for health economic information from what is called substantial evidence, which typically is 2 well-controlled trials, to something called competent and reliable scientific evidence.
And the idea was to allow drug companies more flexibility when communicating economic information to healthcare payers. In other words, to allow more exchanges about value between drug companies and health plans.
AJMC: What about the 21st Century Cures Act addresses the communication of health economic information?
PN: So the 21st Century Cures Act would try to speed innovations from essentially research through the development process through the FDA and into the population. The act contains a provision that would reform the Food and Drug Modernization Act, section 114. So the act would make several changes to that previous legislation.
First of all it would change words in the legislation that says “promotional claims must be directly related to the approved indication,” to the words “promotions must be related to the approved indication.” In other words it changes the law from directly related to related. And while that may not sound like a big change, it suggests that the new law would allow more flexibility for the drug companies making these promotions.
The act also has a number of other changes. One of which speaks to the need for disclosures and transparency around the kind of information that is being communicated and promoted, and, in particular, how it differs from what is on the drug company label. As well as a few other changes that would better define the kind of health economic information that is allowed to be promoted.
AJMC: Would proposed change be enough for you or would you be interested in additional changes?
PN: In my mind, the proposed changes are a step in the right direction. They broaden the statute, they make it more flexible. They at least suggest that drug companies can promote more information from real-world data studies to health plans.
It would be very important for the FDA to clarify what the language of the new act means. Some of the words of the new act are still rather ill-defined. So while it suggests flexibility, it will be very important for the FDA to clarify whether in fact that is the case.