Manufacturers and their communications agencies see great opportunities in a new draft guidance from FDA, but the fear of warning letters still shadows the industry.



The title is dry: “Drug and Device Manufacturer Communications With Payors, Formulary Committees, and Similar Entities – Questions and Answers; Guidance for Industry and Review Staff.” But the guidance, released by FDA during January, has created a quiet furor among drug and device manufacturers, payers, and health economists working with all of these entities. The draft guidance, part of the 21st Century Cures Act, takes the language from section 114 of the 20-year-old Food and Drug Modernization Act and updates it in significant ways.

As Peter Weissberg, group director, market access, at Intouch Solutions notes in his essay, “Outcomes data enters the 21st century” (, FDAMA 114 did not give much guidance to the industry on how to present healthcare economics information to payers.

“With the new guidance, we now have a much clearer understanding of the types of information that constitute HCEI; the specifics of who actually represents a formulary decision maker; and which information not specifically contained with the approved label is appropriate for communication,” Weissberg says. “This should significantly assist field, regulatory, health economics outcomes research (HEOR), market access and brand teams in achieving a better understanding of who can, and should, deliver HCEI and with whom they are able to engage.”

These changes are significant enough that the draft guidance, also known as Cures 3037, was the specific focus of two panels at the International Society for Pharmaeconomic and Outcomes Research’s (ISPOR) recent international conference in Boston.

In one of the panels, Bristol-Myers Squibb’s Laurent Carter, VP, head of Strategic Payer Marketing, says the clarification has been long needed. “We waited 20 years for any feedback at all [on FDAMA 114]; hopefully we won’t have to wait another 20 years for refinement to this guidance,” Laurent says.

Another panelist, Jan Hansen, VP of the Evidence for Access Unit within Genentech’s US Medical Affairs, spoke about the uncertainty FDAMA 114 created among manufacturers. For example, at Genentech the old guidance caused such uncertainty among the medical, legal, and regulatory divisions that one piece aimed at payers went through 50 revisions.

Hansen says “it would be helpful” if FDA created an HCEI review group in light of the guidance, since most reviewers at FDA are used to evaluating clinical trial data that is strictly on the label and aimed at physicians, and do not have much experience with real-world evidence data.

Despite the questions about Cures 3037, manufacturers are welcoming it. Laurent called the guidance “a gift” to manufacturers who wants to disseminate HCEI to payers.

Eleanor Perfetto, Ph.D., from the National Health Council and the University of Maryland School of Pharmacy, came up with a metaphor that the new guidance is the equivalent of upping the highway speed limit, but all the other laws still apply.

“It’s an opportunity for us to go 75 miles per hour, but don’t go crazy and drive on the sidewalks,” Perfetto says.

The current draft guidance widens the door that FDAMA 114 opened. Manufacturers have been communicating information about their products to payers for the past 20 years, but in a more limited fashion.

Dr. Richard Willke, chief scientific officer for ISPOR, notes how manufacturers were providing this information to payers in dossiers, in a format created by the Association for Managed Care Pharmacy. These dossiers communicate information about the cost burden of a specific disease and share economic models extrapolated from clinical trial data. “All the major companies have been doing this for awhile,” Willke says. “Smaller companies have different levels of capabilities. But by and large, any company with a product coming out is aware that this needs to be done and payers are looking for some compilation of the evidence around the drug.”

Both FDAMA 114 and Cures 3037 allowed manufacturers to communicate with payers outside of the dossiers, but Cures 3037 clarifies what constitutes “competent and reliable scientific evidence” – what experts say is the CARSE threshold.

“What constitutes competent and reliable scientific evidence has been one of those areas of a lot of discussion,” Willke says. “Does this mean replicated studies? Clinical evidence usually has that two trials standard.”
ISPOR is trying to set the standards for good practices in studies to determine real world evidence and health economics, Willke told Med Ad News.

“How do you conduct a health economics study?” Willke says. “How do you report a health economics study? How do you do it if it’s a model, how do you do it if it’s real-world data? How do you have an economic analysis alongside a randomized clinical trial? While we cannot force FDA to define CARSE, we can give them a grounding for how they see it.”

The draft guidance comes at a significant time for the pharmaceutical industry. According to the benchmarking firm TGaS Advisors, manufacturers are responding to increasing pressure to demonstrate value and lower the cost of pharmaceuticals, “particularly in today’s uncertain health policy environment.”

This means market access leaders such as Carter and Hansen are investing more in health economics and outcomes research capabilities and enhanced data and analytics, experts at TGaS Advisors say, and policy is top of mind for these leaders. “Market access has become center stage as a strategic imperative for the pharmaceutical industry as increased barriers and pricing pressures limit traditional approaches to market growth,” says Rebecca Villari, practice leader at TGaS Advisors.

In surveying stakeholders and analyzing what has changed from 2016, TGaS’ Market Access & Reimbursement practice found that the impact of government policy and influencers, considered secondary last year, is now a major concern. “One respondent noted, ‘We are currently monitoring 44 pieces of legislation in 26 states,’” TGaS experts say. These experts additionally note that the movement toward value-based contracting has increased.

Nearly two-thirds of respondents, or 59 percent, saw it as one of the top three key trends, experts say.

As a constant from 2016, “Payers continue to raise the bar for clinical evidence, including for rare diseases, and emphasize the importance of outcomes data,” TGaS experts say. In addition, payers continue to increase utilization management to drive use of preferred products, and pricing pressure remains strong.

When FDA issued its final guidance for consumer-directed broadcast advertisements in 1999, a new golden world of promotion opened up to manufacturers.

Cures 3037 could introduce a similar opportunity for promotional work – but in a more limited fashion. This time, instead of consumer agencies creating giant TV campaigns aiming for slots on the Super Bowl, those who will see the action are healthcare agencies with a focus on market access and who are dealing with C-suite individuals.

The comparison of the potential impact of Cures 3037 with impact of the DTC draft guidance “is a good parallel,” Weissberg says. But, “The guidance in and of itself isn’t the impetus for this watershed of outcomes based information. There’s been a lot of momentum moving in the market for a variety of reasons. People often think about the Affordable Care Act as being another big change, moving away from fee for service to fee for value and outcomes-based contracting.

“The market was very hungry for this new type of guidance, and now the guidance is in place. So the combination of these two things – the momentum that was already building coupled with this guidance, I think will drive a lot more opportunities for communications about outcomes on things that were off label.”

Manufacturers are ramping up internally, says Michael Zilligen, president of Ogilvy CommonHealth Payer Marketing and Ogilvy Healthworld Payer Marketing.

“One of the things that I am seeing is that the commercial teams and the med-legal teams within the organizations are dialoguing a lot more,” Zilligen says. “Because the manufacturers, the commercial marketers who have a clear understanding of what the formulary decision makers and payers want to see, i.e. more of this real world evidence and healthcare economic information in the populations that they’re managing – the commercial marketers realize that the payers are looking for this and really want this, and are having the dialog with their internal med-legal teams to see what is the degree of risk and the guardrails that they are willing to take on.”

According to Daniel Sontupe, head of The Bloc’s Value Builders, “There are a couple of companies that have started to investigate it. There have always been some companies willing to push the envelope with FDAMA 114, but there’s one large pharma company that has actually built an entire group within their marketing department that’s going to focus solely on this type of marketing.”

Under FDAMA 114, “the most aggressive companies would still be a little aggressive and the more conservative companies would err on the side of not doing this type of promotion,” Sontupe says. “And the ultraconservative companies would not even talk about doing it.

“Now you’re going to see a lot of the moderate companies look to figure out how they can interpret this rule or this new guidance, to start promoting the value of their brands.”

Ross Maclean, senior VP, head of medical at Precision Health Economics, part of Precision for Value, says he is “surprised” at the number of pharmaceutical companies who never tried to create communications for payers under FDAMA 114.

“They’ve got somewhere between zero, or one, or two proactive economic pieces,” Maclean says, “I think the reason for that is that they’re concerned about – FDAMA 114 for me is less about the technical issues of can we tell a story, does the evidence support the value story, how do I craft this value message, this HCEI message. That’s a technical issue.

“But I think it’s really about the risk tolerance of the organization. Because ultimately, while there are commercial concerns, and payer challenges, and payer opportunities, I believe it ultimately comes down to the risk tolerance of the individual pharma company and by extension, the risk tolerance of individuals with the legal and compliance and business departments, putting that piece out there.

“So if you combine I guess the three things – if you combine the hesitancy and risk-aversion to using 114; the excitement but wait-and-see attitude for 3037; and the ‘I won’t want to be the first to get a letter’ because it’s a guidance, not law – my sense it that we’ll see less uptake of the guidance than the opportunity first appears to offer.”

Maclean says in looking at Cures 3037, “at first glance it looks like nothing but a good thing. It’s going to open the floodgates or open the doors to a much more broader, much more relevant perhaps, HCEI communication. But what I am hearing from our customers is that they’re excited, they’re hopeful, but they are waiting for the definitive guidance. And I think the opportunity is not too much around what the definitive guidance is – guidance is still guidance, it’s not legislation – whoever goes first with the new guidance, will be the first to get this mythical warning or untitled letter that no one’s ever seen. It’s interesting, because when I speak to the clients, the lawyers always remind you that nobody has yet received a letter from FDA about 114, and nobody wants to be first.”

Agency executives say the amount of risk their clients are willing to take will drive how many will dive into the HCEI pool and create campaigns using this information to educate payers about their products.

“Personally, I am every enthusiastic about it, as a health economic outcomes researcher, I think it does open the floodgates to competent and reliable and well-conducted interpretation of the data from a health economics perspective,” Maclean says. “But I think it ultimately rests with the individual company’s legal and compliance and commercial leadership who will need to make that risk decision. Just because I like it doesn’t mean to say they will.”

One ambiguity under Cures 3037 that companies will struggle with is what constitutes a payer-like or prescriber-like group according to the law.

“Within a payer, there are different decision makers,” Sontupe says. “So if we talk about traditional payers, your health plans, Medicare, you have a drug side and a medical side. Typically, they manage separate budgets. Typically, the pharmacy director, that’s the drug side guy, doesn’t want to pay for the drugs, even if you’re getting less hospitalization, and all this other stuff, because that’s not affecting that budget, it’s affecting the medical budget.
“So you need to take the broader umbrella view and look at it holistically as how are we lowering overall costs. That’s why some of these new guidances are important to go after these newer types of organizations, for example, patients that are in medical homes or in accountable care organizations, groups that are making big decisions.
“And that’s where most of the ambiguity is, whether or not those types of organizations are considered prescribers or payer-like companies.”

There are universal cautions agencies are giving their clients when it comes to putting together information for payers under Cures 3037. One is being careful that the information does not convey anything about an indication specifically not on the label.

“The one thing that we are cautioning them is do not at any point go off label – do not put a different indication in, if you’ve got a drug that’s good for a certain disease, do not apply a real world study that’s not on label,” Sontupe says. “That’s the one thing that’s going to trip everybody up. Because though a study may be good data and meets the criteria, if it’s off label, and the one thing very specific the draft guidance says is, ‘relating to the label.’ And we’re telling our clients to stay on label. Because if you don’t that’s where you’re in trouble.

However, there is latitude for sharing some information derived from studies that are not part of the labeling but are themselves based on the label.

“One [study] could be around duration of treatment,” Zilligen says. “Where the approved indication of a drug does not limit duration of use, healthcare economics information analysis may incorporate information about longtime use of the drug for that specific information over a period of time that was different than what was in the studies or the label. We’re still talking about everything that was in the approved indication, but outside of the label.

“Let’s say a drug is approved for a chronic indication but there’s really no limit on its duration of use based on a 24-week study. But economic consequences beyond 24 weeks could be modeled. Another example could be around dosing. Healthcare economic data analysis can be based on studies of approved dosage forms and strengths, for its approved indication, where maybe dosing regimen varies from what’s in the label.

“Those are just two examples. And maybe the manufacturer is going to use an observational study, or a chart review, or a retrospective claims analysis that looks at drug utilization data from a health plan database, but where maybe the actual patient use of an approved dosage form and strength is outside the recommended dosing in the label,” Zilligen told Med Ad News.

Maclean says he tells clients who have already put together payer pieces under 114, “if you’ve figured that process out and you have processes and standards and checks and balances of the medical regulatory legal team, carry on.”
But for the companies that are new to this area, Maclean is encouraging them to do two things, “Firstly, engage your legal and compliance people early, don’t go and build the whole HCEI story – which can take many months to generate the evidence and many iterations to make the slides and get the story right – and then go to the lawyers and say, ‘Can we leave the building with this?’ he says.

“Map your process, and make sure you’ve got senior executive level support in the brands that you are pursuing. Because without the legal and compliance being on board, without senior endorsement, up to and including business-level support, no matter how clever the FDAMA 114 piece is, it’s not going to leave the building.

“And secondly, before you embark on this likely 3, 6, 9, 12-month process, draft a one-page concept and put it in front of those people and say, ‘If we bring this to you, are you likely to let us use it?’ So you get an initial read on the story you think you’d like to tell, anchored to the payer challenge and anchored to the brand priorities and needs, early on before you go spend months of effort, to ultimately make something that might not leave the building,” Maclean says.

Sontupe told Med Ad News, “What we’re telling our clients, and it’s hard to get them to move on this because you now how slow pharma tends to move, is, ‘Get in front of your regulatory committees today with this information, and start doing concept reviews so your regulatory committees know that it is coming and it is viable and it important.’”

At ISPOR’s Boston meeting, Genentech’s Hansen says putting together and promoting these studies to payers will take educating medical, legal, and regulatory colleagues who are not conversant with HEOR and HCEI information. “We always brought it back to the patient and standing behind the excellent work that Genentech scientists do,” Hansen says.

And speaking of education, Maclean says companies should keep in mind how these messages to payers are delivered. “If the delivery for your FDAMA114/3037 piece is an existing HEOR-skilled field-based organization, then training them and knowing that they will deliver it competently, on label, and in a technically sophisticated manner is obviously secure,” Maclean says. “But if you’re asking others who don’t have they professional training or expertise to deliver it, that’s another type of risk. There’s the risk of telling the story, and there’s the risk of, though the story is well built, will be badly told – for example, by someone who’s in a customer-facing role who is not equipped professionally or in their skills to deliver it.”

“So there’s two parallel tracks, has the organization got the ability to develop and review and approve the material, that’s one type of risk. And the second type of risk is has the organization the ability to take that approved piece of material and deliver it to a payer-decision maker in a compliant and a appropriate way.

“I wouldn’t want to talk ill of any pharma colleague, but you don’t want someone who is unable to explain a stochastic simulation model or a complex network meta-analysis, to be explaining how that type of analysis is the source of healthcare economic information, which is relevant to the payer. If you can’t explain it, you’ll make a mess of it,” Maclean says.

A few companies have well-trained HEOR teams, Maclean notes. “I know from my experience teams ranging from five to 25 people – full time staff, in the field, facing different types of payer decision makers – national insurers, state and local insurers, IDNs, the like,” he says. “But some companies have got nobody. And then they’re facing the second element of risk, which is who do you get to deliver the piece, are they comfortable and capable of delivering it in the manner to which it was designed.”

Another thing pharmaceutical companies have to keep in mind is not sharing this payer-focused information with practicing clinicians.

“The reality is I think you’re going to see is that as long as you’re not talking to a prescriber, I believe you’re going to have safe harbor based on the 21st Century Cures Act and the new guidance,” Sontupe says. “So as long as you’re talking to the C-suite, the people making coverage and reimbursement decisions, I think pharma is going to have some protection. But that’s my opinion and the reality is no one really knows for sure.”

In the case of a pharma payer access rep speaking with a physician who is also the prescribing decision-maker for an integrated delivery network, or IDN, the rep has to make sure they are speaking with the physician in his payer-decision capacity.

“In my experience from a pharma perspective, that’s well-defined and that is the individual employed by the pharmaceutical company has to clarify that they’re speaking to someone in their HCEI payer decision-making role,” Maclean says. “Dr. Smith could be both a provider and P&T [pharmacy & therapeutics] formulary decision maker.

“But one needs to speak to Dr. Smith in the latter role and you need to clarify that you are speaking to him or her in that payer decision making role and not in their provider role, even though this can be a seamless continuation from one to the other. So that’s pretty clear, you can’t walk in on Dr. Smith and simply flip straight from the professional promotion role to the healthcare economics information role without pausing and making that clarification.”

One thing is very clear to manufacturers – payers want this information because they have some goals in common with the manufacturer.

“Payers and manufacturers have a couple of common interests,” Zilligen says. “And one of those is improving patient outcomes, and ensuring efficiency, in that the right drug gets to the right patient at the right time. The manufacturer wants that too, because if you’re getting the right drug to the right patient, the drug is going to have better outcomes and results. And the payers want that too.”

The quality and sources of that information will be extremely important, agency experts say.

“The new information sets that may be available, the quality of the information, from the data collection, to the analysis and the reporting, that still needs to be really high,” Zilligen says. “And that’s a key point that should really resonate here. That starts from the creation, the collection, to the analysis and reporting.”

According to Maclean, meeting payers’ expectations for quality information may be difficult.

“The health insurers often present a quandary,” he told Med Ad News. “And there is both guidance from them through the AMCP dossier format and a request from them for peak evidence of value. But anecdotally we hear, that whatever evidence is presented to them, there is a question as to the integrity and validity of that evidence. So I get a sense of ‘I’m not sure what I want but I’m sure that this isn’t it.’”

Some payers are only focused on the results for the nearer term, some on the longer term. “There’s a tension, right the need to meet the year-on-year actuarial challenges, the business of insurance, versus the desire to take that longer-term perspective,” Maclean says. “But I think that poses a chance for the pharmaceutical industry, because a near-term pharmacy budget impact is something that’s very familiar to everybody.”