The Food & Drug Administration and the Centers for Medicare and Medicaid Services signed a Memorandum of Understanding June 23 intended to promote data-sharing between the two agencies. Announcement of the MOU came from Center for Devices & Radiological Health director Dr. Jeffrey Shuren at a June 24 public workshop on device innovation. The MOU, Shuren said, “will allow for the first time routine and timely sharing of information and expertise between our two agencies to strengthen our ability to achieve our respective missions. Industry news sources saw greater potential, however, characterizing the agreement as “a first step toward parallel reviews for marketing approval and Medicare coverage.”
FDA and CMS have wanted to share information for years. Indeed, a 2005 policy statement from then-HHS secretary Tommy Thompson presented broad inter-agency information sharing, including parallel review “at the request of an applicant, and with the concurrence of both agencies,” as a fait accompli. Perhaps, but such reviews have been few and far between. And Shuren, based on his June 24 comments, is ignorant of any mechanism for performing a parallel review. While there are some highly visible examples of Medicare coverage and payment determinations that were essentially simultaneous with FDA market clearance (e.g. human recombinant erythropoietin for chronic dialysis patients, drug-eluting stents), we can say with certainty that the vast majority of new technologies and drugs have not benefited from the compressed timeline to coverage that is the attraction of a parallel review process.
It’s not just the government agencies that have been obstacles to information sharing and/or parallel review, of course. Many reimbursement consultants encourage their clients to meet with CMS early in the clinical development process to introduce an innovative technology, explain their clinical plan and regulatory status and generally set the table for a more expeditious CMS coverage decision process as soon as possible after commercial introduction. At the end of virtually every such meeting, CMS will request written permission from the company to speak with FDA staff about the technology and for access to information in FDA submissions. And many companies gag on the request, refusing to sign off on inter-agency sharing, but offering to consider any data requests submitted directly to them.
Why not grant CMS permission to talk to FDA and/or to access data submitted to FDA? There seem to be two reasons:
- FDA is subject to a legal requirement to safeguard applicants’ proprietary data; CMS is not. Many companies worry that proprietary data accessed by CMS from FDA files or personnel will be publicly released.
- Many companies do not trust the agencies to play fair with shared information; they believe that if CMS and FDA begin to talk, Medicare’s reimbursement concerns will affect FDA’s regulatory decisions and cost will become a factor in achieving market clearance.
Industry, in other words, has been ambivalent about agency coordination and parallel decision processes. Information sharing and parallel review sound like excellent ideas that could yield positive coverage determinations and advantageous reimbursement much earlier in the product life cycle than is now typically the case for a new technology (or drug). But those same processes might enable the regulatory and reimbursement functions to become too closely related, letting each of the agencies off the very carefully bounded reservations defined in current law and regulation. The intrusion of cost-benefit considerations into the regulatory approval equation has for some time defined industry’s worst nightmare and the fear — despite very clear, long-established and strong legal prohibitions against consideration of cost by either FDA or CMS — is that free communication between FDA and CMS would open the door to using cost as a market approval consideration.
The full text of the June 23 MOU was finally released July 8 and there may be far less there — either positive or negative — than early speculation would have indicated. The critical elements of the agreement are as follows:
- The goals of the collaboration are to explore ways to –
- Further enhance information sharing efforts through more efficient and robust inter-agency activities
- Promote efficient utilization of tools and expertise for product analysis, validation and risk identification
- Build infrastructure and processes that meet the common needs for evaluating the safety, efficacy, utilization, coverage, payment and clinical benefit of drugs, biologics and medical devices
- A single designated point person in each agency will be the contact for all requests for inter-agency information sharing
- Requests will be honored unless the recipient agency has a good reason otherwise — good reasons might include –
- Lack of available staff to fulfill the request
- The request is too burdensome
- The request is inconsistent with agency priorities
- The request is unreasonable; and/or
- There are legal prohibitions to responding
- The agencies agree to establish procedures to guard against inappropriate or unauthorized disclosure of trade secrets or proprietary commercial information, protected personal health information, and/or other information protected by law from disclosure.
- The agreement does not change any legal or regulatory powers or responsibilities of either of the agencies under current law and regulations.
The bottom line, then, is that a point person in each agency will receive information requests from the other and put the requester in contact with the appropriate staff person, who will respond to the request in a reasonably timely manner if there is staff and other resources and interest and desire to do so, and if the request is consistent with other priorities. Shared information will be protected from any inappropriate disclosure and can only be used for the legally appropriate activities and functions of the requesting agency.
The greatest virtue of the agreement is that the personal skills, expertise and work product of staff in one agency will become available to the other — potentially leading to better-informed decisions by both agencies. We would hope that would be considered a good thing by industry. From the device reimbursement perspective, however, the benefits of the MOU are limited by the simple empirical fact that many devices gain FDA approval without sufficient clinical data to support an informed coverage policy determination. All the information sharing in the world cannot change the fact that CMS needs to know different things for a coverage determination than FDA needs to know for market clearance. For advanced technologies that come to market through 510(k), and for many PMA devices that fail to incorporate reimbursement planning into their clinical programs, post-approval clinical data will remain essential for reimbursement decision-making. In those cases, there is no relevant information to share and parallel approval is an unrealistic goal.
Edward Berger is a senior healthcare executive with more than 25 years of experience in medical device reimbursement analysis, planning and advocacy. He’s the founder of Larchmont Strategic Advisors and the vice president of the Medical Development Group. Check him out at Larchmont Strategic Advisors.