Congress Expands Pathway for Drug & Device Manufacturers’ Pre-Approval Communication of Health Care Economic Information to Payors, Formularies, & Similar Entities

The legislation previously introduced as the Pre-Approval Information Exchange Act of 2022 (“PIE Act”) was passed as part of Congress’s December 23, 2022 omnibus spending bill. Once signed into law, this legislation will amend the Federal Food, Drug, and Cosmetic Act’s (FDCA’s) provisions on misbranded drugs and devices to formally allow drug and medical device manufacturers to proactively share investigational drug and device information, including health care economic information, with payors, health plans, formulary committees, and other similar entities prior to the clearance or approval of the drug or device or new use of the drug or device but with now-statutory strings attached.

The US Food and Drug Administration (FDA) has long had the authority to enforce against pre-approval promotional communications, and a pathway for pre-approval communication of health care economic information regarding the selection of drugs for coverage and reimbursement was enacted under the Food and Drug Administration Modernization Act of 1997. Current guidance from FDA, finalized in 2018, expressly permits drug and device companies to provide some details about investigational products or investigational uses of marketed products to payors, formulary committees, and similar entities prior to approval or clearance of the product or its new use; however, for device companies this has come in the form of non-binding guidance that lacks a formal anchor in the statutory language. The inclusion of the legislation previously known as the PIE Act in the omnibus spending bill formally establishes a statutory pathway built on FDA’s 2018 final guidance for both drug and medical device companies to engage in pre-market communications about health care economic information with payors, formulary committees, and similar entities.

Under the title “Facilitating Exchange of Product Information Prior to Approval,” Section 3630 of the omnibus spending bill first expands the FDCA’s existing language on health care economic information to make it applicable to both drugs and devices. Previously, this section of the statute only covered drugs and, on enactment, will be updated as so noted in bold below with the following references to the US Code:

Section 502(a) of the Food, Drug & Cosmetic Act (21 U.S.C. §352) – Misbranded drugs and devices

A drug or device shall be deemed to be misbranded–

(a) False or misleading label

(1) If its labeling is false or misleading in any particular. Health care economic information provided to a payor, formulary committee, or other similar entity with knowledge and expertise in the area of health care economic analysis, carrying out its responsibilities for the selection of drugs or devices for coverage or reimbursement, shall not be considered to be false or misleading under this paragraph if the health care economic information relates to an indication approved under section 355 of this title or under section 262(a) of title 42 section 505, 510(k), 513(f)(2), or 515 of this Act or section 351 of the Public Health Service Act for such drug or device, is based on competent and reliable scientific evidence, and includes, where applicable, a conspicuous and prominent statement describing any material differences between the health care economic information and the labeling approved for the drug or device under section 505, 510(k), 513(f)(2), or 515 of this Act or section 351 of the Public Health Service Act section 355 of this title or under section 262 of title 42. The requirements set forth in section 355(a) of this title or in subsections (a) and (k) of section 262 of title 42 section 505, 510(k), 513(f)(2), or 515 of this Act or section 351 of the Public Health Service Act shall not apply to health care economic information provided to such a payor, committee, or entity in accordance with this paragraph. Information that is relevant to the substantiation of the health care economic information presented pursuant to this paragraph shall be made available to the Secretary upon request.

(2) (A) For purposes of this paragraph, the term "health care economic information" means any analysis (including the clinical data, inputs, clinical or other assumptions, methods, results, and other components underlying or comprising the analysis) that identifies, measures, or describes the economic consequences, which may be based on the separate or aggregated clinical consequences of the represented health outcomes, of the use of a drug or device. Such analysis may be comparative to the use of another drug or device, to another health care intervention, or to no intervention.

(B) Such term does not include any analysis that relates only to an indication that is not approved under section 355 of this title or under section 262 of title 42 section 505, 510(k), 513(f)(2), or 515 of this Act or section 351 of the Public Health Service Act for such drug or device.

The PIE Act, as included in the omnibus spending bill, also adds to FDA’s existing misbranding authority a new subsection (gg), which codifies FDA’s 2018 non-binding final guidance on communications with payors, formulary committees, and similar entities about health care economic information related to uncleared/unapproved products or uses of marketed products. Specifically, the amended law, on enactment, will provide:

[N]o drug or device shall be deemed to be misbranded . . . through the provision of truthful and not misleading product information to a payor, formulary committee, or other similar entity with knowledge and expertise in the area of health care economic analysis carrying out its responsibilities for the selection of drugs or devices for coverage or reimbursement if the product information relates to an investigational drug or device or investigational use of a drug or device that is approved, cleared, granted marketing authorization, or licensed under section 505, 510(k), 513(f)(2), or 515 of this Act or section 351 of the Public Health Service Act (as applicable).

21 U.S.C. § 352(gg)(1) (as revised by the December omnibus spending bill) (emphasis added).

Notably, “product information,” for purposes of the amended statute mirrors the contents of FDA’s 2018 final guidance and includes:

• Information describing the drug or device (such as drug class, device description, and relevant features);
• Information about the indication(s) being investigated;
• The anticipated timeline for a possible approval, clearance, marketing authorization, or licensure;
• Drug or device pricing information;
• Patient utilization projections;
• Product-related programs or services; and
• Factual presentations of results from studies that do not characterize or make conclusions regarding safety or efficacy.

The expanded misbranding authority also gives the force of law to the 2018 final guidance’s “recommendations” from the FDA by stating that appropriate product information under subsection (gg) must include:

• A clear statement that the investigational drug or device or investigational use of a drug or device has not been approved, cleared, granted marketing authorization, or licensed and that the safety and effectiveness of the drug or device or use has not been established;
• Information related to the stage of development of the drug or device involved (e.g., status of studies; how the study relates to the overall development of the product; whether an application, premarket notification, or request for classification for the product or use has been submitted to FDA and/or when it is planned);
• Factual presentations of results from studies, so long as not selectively presented, including a description of material aspects of study design and results and describing all material limitations to such studies;
• If applicable, a prominent statement disclosing that the relevant indication(s) has not been approved, granted marketing authorization, cleared, or licensed — and a copy of the current labeling; and
• Updated information, if previously communicated information becomes materially outdated as a result of significant changes or as a result of new information regarding the product or its review status. (Notably, it is unclear if this expanded authority creates an affirmative duty to update when further discussion with prior audiences is not planned.)

As also mirrored from FDA’s 2018 final guidance, the expanded authority prohibits a drug or device manufacturer from representing that:

• An unapproved product has been approved, cleared, granted marketing authorization, or licensed OR has otherwise been determined to be safe or effective for the purpose being studied; or
• An unapproved use has been approved, granted marketing authorization, cleared, or licensed OR that the product is safe or effective for the unapproved use.

In addition, because this expanded authority is intended to allow drug and device manufacturers more opportunity to provide important and decision-shaping product information to payors, formulary committees, and similar entities, Section 3630 of the omnibus spending bill also includes a requirement that the US Government Accountability Office (GAO) conducts a study beginning in 2028 analyzing the types and manner of health care economic information communicated between drug and device manufacturers and payors, as well as metrics about numbers of applications for approval of new products or uses of products, how frequently FDA grants such approvals, and the timeline between initial payor communications and initial marketing of the product.

At this early stage, it is unclear whether FDA will issue any implementing regulations associated with the legislation formerly known as the PIE Act; and it is also unclear how GAO will implement the future study on pre-market payor communications. For example, while there is no current affirmative requirement for manufacturers to report pre-market communications to payors, formulary committees, and similar entities, it is unclear whether manufacturers will be required or requested to disclose when such communications occur in order to enable GAO to determine the timeline between these communications and marketing authorization to satisfy its statutory reporting obligation. We will continue to monitor for information that becomes available about this legislation.