- Hoping to pave the way for greater adoption of value-based contracts, the Food and Drug Administration on Jun. 12 published final guidance that clarifies how drugmakers can share product information with payers while remaining compliant with FDA rules on communication.
- Notably, the guidance allows for drugmakers to provide payers with certain information about unapproved drugs or unapproved uses of already cleared medicines — an acknowledgement from the FDA that payers and drugmakers may need to negotiate ahead of an approval decision to appropriately craft a value-based payment scheme.
- "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," said FDA Commissioner Scott Gottlieb in a June 12 statement.
Scott Gottlieb and his boss, Health and Human Services Secretary Alex Azar, have preached value-or outcomes-based contracts as part of the solution to rising prescription drug costs.
Rather than basing rebates and discounts on volume, these types of contracts generally peg the net price paid by insurers for a drug to whether patients achieve a certain health outcome.
The approach, while it has attracted some interest from drugmakers and payers, hasn't exactly become mainstream. Legal hurdles like Medicaid Best Price reporting as well as challenges in implementation have limited adoption mainly to competitive drug classes or to products facing significant resistance from payers.
With its finalized guidance, the FDA hopes to make one aspect of brokering these deals a little easier.
"We have heard from some manufacturers that in the absence of clear guidance from the agency, they were inhibited from sharing certain economic and other information and, potentially, even from generating additional rigorous data for payors to evaluate in determining the value of a product to their health plans and their beneficiaries, and then to tie value-based contracts to these measures," Gottlieb stated.
In response, the FDA set out to clarify what economic information or analyses drugmakers can share with payers about their products that will not be judged false or misleading. For example, a company could share details of clinical outcome assessments, studies of disease burden or data on treatment adherence while staying above board with the FDA.
The guidance also provides guidelines for sharing limited information about unapproved products or unapproved uses of OK'd drugs. This is important because negotiation between drugmakers and payers on value-based contracts can take time. By permitting some communication, the FDA aims to help companies construct these agreements ahead of an approval decision.
"It'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 wrote.
Take cell and gene therapies as an example. Several recently approved treatments, such as Spark Therapeutics' Luxturna (voretigene neparvovec-rzyl) or Novartis' CAR-T therapy, carry extremely high price tags. Both drugmakers have set up, or announced plans to set up, outcomes-based payment schemes for the therapies.
With more and more cell and gene therapies advancing through clinical testing, permitting drugmakers to discuss reimbursement with payers ahead of time should help smooth initial access.
The agency notes, however, that this guidance only applies to communications with payers, not doctors or patients — although a broader debate about off-label communication remains ongoing.
Also on Tuesday, the FDA published a separate guidance document that provides the agency's thinking on how drugmakers can share information with payers that's not contained in a drug's product label.
The FDA's aim in promoting value-based contracts is to help mitigate rising prices. It's worth noting, however, that while value-based contracts can help insurers manage costs, the agreements don't necessarily mean lower prices across the board. Drugmakers might agree to pay higher rebates if certain outcomes aren't met for a specific payer's members, but list prices generally aren't affected.