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FDA Takes Action to Allow Broader Manufacturer Communications

February 13, 2017

Days before President Trump was sworn into office, and in response to industry requests, the Food and Drug Administration (FDA) took several actions to provide greater clarity regarding its views on manufacturer communications to doctors, payors, patients, and others. The FDA released two draft guidance documents that described the kinds of information drug and device manufacturers can share: (1) “Medical Product Communications That Are Consistent With the FDA-Required Labeling;” and (2) “Drug and Device Manufacturer Communications With Payors, Formulary Committees, and Similar Entities.” In addition, the FDA reopened the comment period for communications regarding unapproved (off-label) uses and published a memorandum with its analysis of First Amendment considerations. These actions, which represent a material shift in the FDA’s position on these issues, expand information manufacturers can communicate and will facilitate broader manufacturer communications.   

I. The Reasons for the Guidance

It is a widely shared opinion that everyone benefits when scientific information is shared broadly, and liberally, provided the information is shared in a complete and accurate manner. It is also widely accepted that manufacturers have more information about their products than anyone else. Unfortunately, a fear of FDA enforcement actions has left manufacturers reluctant to share important information not included in their FDA-approved labels. This has meant, for example, that scientific studies concluded after the FDA approved a drug, which may help doctors and formulary committees better understand the risks of a given drug or compare its benefits to a competitor, have not always been shared. Sharing this kind of information, however, not only helps manufacturers promote their products, but also ensures patients and doctors have the most current information regarding the benefits and risks of a drug when making treatment decisions.

Believing in the importance of disseminating this information, as well as their right to share it, manufacturers fostered a robust legal and policy debate on what limits, if any, there should be on their communications about approved or unapproved uses. This debate was driven through Citizen’s Petitions and in court cases. Until now, it has been the courts that have done the most to expand the universe of permissible promotional speech. In 2012, relying in part on the Supreme Court’s Sorrell v. IMS Health Inc., 564 US 552 (2011) decision, the Second Circuit in US v. Caronia, 703 F.3d 149 (2d. Cir. 2012), held that the FDA cannot prohibit “speech promoting the lawful, off-label use of an FDA-approved drug.” This holding was built upon in Amarin Pharma, Inc. v. United States Food and Drug Administration, 119 F. Supp. 3d 196, 224 (S.D.N.Y. 2015), in which a district court concluded that the FDA may not prosecute a manufacturer for “truthful promotional speech alone,” even if that speech touts an off-label use.1   

Following Caronia and Amarin, the FDA began recognizing First Amendment concerns by reaching a settlement with Pacira Pharmaceuticals. Pacira Pharms., Inc. v. FDA, No. 15-cv-7055 (S.D.N.Y. Dec. 14, 2015). 

Although the gains made in these litigations have been important, each has been narrow in scope and limited to the particular facts of the case. The FDA’s guidance, however, while not addressing important issues regarding communications related to unapproved uses, does provide important guidance on communicating information not included on the FDA-required labeling, including health care economic information.  

II. Draft Guidance on Communications Consistent with FDA-Required Labeling

Brief Overview

On January 17, 2017, the FDA released draft guidance entitled “Medical Product Communications That Are Consistent with the FDA-Required Labeling – Questions and Answers.” This guidance describes the kinds of information not included in a drug’s FDA required labeling that a manufacturer may communicate but will not be “evidence of a new intended use.” The guidance also describes the kind of scientific support manufacturers should have before exchanging this kind of information. By following the recommendations outlined by the FDA, manufacturers can communicate additional information with decreased risk of triggering an FDA enforcement action.  

The FDA offers a three-factor test for determining whether a communication is consistent with the FDA-required labeling.    

  • Factor 1: How the information communicated compares to the information in the FDA required labeling. Does it relate to the same indication described in the required labeling? Does it concern the same patient population? Does it conflict with the limitations on use described in the required labeling? Does it conflict with the recommended dosage, use regimen, or strength? 
  • Factor 2: Whether the communication increases the potential for harm to health. 
  • Factor 3: Whether the directions for use in the FDA-required labeling enable the product to be safely and effectively used under the conditions represented/suggested in the communication. 

To assist manufacturers in properly applying these factors, the FDA provides several examples of acceptable communications: (1) comparative product information; (2) information providing additional context about adverse reactions; (3) information about a product’s onset of action; (4) long-term safety and efficacy information; (5) information about the effects or use of a product in specific patient subgroups that are included in its approved/cleared patient population; (6) patient-reported outcomes; (7) information about product convenience; (8) additional context about the mechanism of action described in the FDA-required labeling. 

The information a manufacturer communicates should be “grounded in fact and science and presented with appropriate context.” Those “[c]ommunications that lack appropriate evidentiary support are likely to be false or misleading.” Moreover, “any data, studies, or analyses relied on should be scientifically appropriate and statistically sound.” Relying on an inadequate study renders an otherwise acceptable communication misleading, and disclosing the limitations of the study does not correct the misleading message.  

Finally, to ensure these communications are not misleading, manufacturers should: (1) accurately represent any study results or data relied upon to support a firm’s communication and prominently disclose any material aspects of study design and methodology; (2) accurately characterize and contextualize relevant information about the drug or device, and disclose unfavorable or inconsistent findings; and (3) provide relevant information from the FDA required labeling alongside the communication to properly contextualize the information. 

Insights and Analysis

This guidance represents a material shift from existing FDA policy. In the past, promotional claims based on information not contained in approved labeling could result in Untitled or Warning Letters from the FDA or other enforcement activity. As a result, many companies would refrain from making such claims. But now, firms are able to share this kind of information with less risk of triggering an FDA inquiry or enforcement action. 

Still, as noted above, manufacturers should be careful to only share information based on studies that are “scientifically appropriate and statistically sound.” This scientific standard represents an even further and more dramatic shift in the FDA’s thinking because it is significantly lower than the FDA’s “substantial evidence standard,” which is the benchmark for initial approval and making promotional claims. “Substantial evidence” is defined in the Federal Food, Drug, and Cosmetic Act and FDA regulations as generally consisting of “adequate and well-controlled” studies. 21 U.S.C. § 355(d); 21 C.F.R. § 314.126. In contrast, under the more permissive standard in this draft guidance, manufacturers can share information based on analyses of healthcare databases and other “real-world data” as well as simple observational studies that do not satisfy the detailed regulatory definition for “well-controlled” studies. 

Buried in an example near the end of the guidance document, the FDA offers a further concession to industry. They consider the example of a drug (Drug A) approved to treat asthma based on a study which included a comparison to a competitor drug (Drug B). In the study, Drug A outperformed Drug B. The study was not designed to determine which drug was superior. Nonetheless, in the example, the manufacturer uses this study to promote Drug A as clinically superior to Drug B. The FDA concludes that while communicating this kind of information would be consistent with the required labeling, it would also be considered misleading because it makes a claim of superior effectiveness based on a study not designed to evaluate superiority. Instead of ending the discussion there, and simply banning firms from promoting this study, the FDA goes on to suggest that if a firm wishes to present data and information from this study, it could, as long as it describes the material limitations of the study and makes clear that the study was not designed to compare the efficacy of the two drugs. The FDA emphasizes further that the manufacturer should not communicate that Drug A has superior effectiveness. Even with these limitations, the fact that the FDA is permitting the promotion of any data from this potentially misleading study illustrates its willingness to permit broader communications by firms. 

III. Draft Guidance on Communicating with Payors and Others

Brief Overview

In 1997, Congress passed the Food and Drug Administration Modernization Act (FDAMA). Section 114 of this law amended the statutory language in 21 U.S.C. § 352(a) relating to the kind of health care economic information (HCEI) manufacturers may provide to payors and similar entities. However, the FDA never issued guidance interpreting this provision. Through small but significant changes to Section 114, the 21st Century Cures Act, signed into law last December, spurred the FDA to issue long-awaited guidance on communicating with payors and disseminating HCEI.

On January 18, 2016, the FDA released draft guidance entitled “Drug and Device Manufacturer Communications with Payors, Formulary Committees, and Similar Entities – Questions and Answers.” This guidance describes the kinds of HCEI relating to approved prescription drugs that, when shared, will not be deemed false or misleading, and which the FDA will not consider evidence of a new intended use. It also presents the limited kinds of information about investigational drugs and devices that firms may share.

Before digging into the guidance, it will be helpful to define HCEI. HCEI is “any analysis . . . that identifies, measures, or describes the economic consequences . . . of the use of a drug.”  21 U.S.C. § 352(a). The FDA interprets this to mean the “economic consequences related to the clinical outcomes of treating a disease . . . or of preventing or diagnosing a disease.” 

For approved prescription drugs, the key issue is the type of HCEI the FDA considers to “relate to an approved indication.” The FDA offers several examples of types of HCEI that relate to an approved indication, and thus would not be considered false or misleading. 

  • Analyses regarding duration of use that incorporate information about the long-term use of the drug not included in the FDA-required labeling.
  • Analyses based on the use of the drug in practice settings that differ from those of the clinical trials initially submitted to the FDA. 
  • Analyses derived from studies of broad management of a disease, e.g., economic consequences of absent work days as a result of symptoms associated with a disease.
  • Analyses based on data or studies of approved dosage forms and strengths of a drug for its approved indication, where the dosing regimen varies from the FDA-required labeling. 
  • Analyses of treatment effects in patient subgroups that are within the patient population for the approved indication. 
  • Analyses derived from studies of treatment impacts on length of hospital stay. 
  • Analyses derived from clinical data demonstrating an effect on a surrogate endpoint known to predict clinical benefit.  
  • Analyses derived from studies involving the approved indication of a drug that assess clinical outcome assessments or other health outcome measures. 
  • Analyses based on data estimating patient persistence on a drug. 
  • Analyses derived from studies comparing the safety or effectiveness of a drug for its approved indication to another drug. 

To avoid communicating HCEI that is false or misleading, firms should also “include appropriate background and contextual information.” The FDA outlines five topics that should be described: (1) study design and methodology; (2) generalizability; (3) limitations; (4) sensitivity analysis; and (5) additional material information for a balanced and complete presentation.

Additionally, HCEI for prescription drugs is considered promotion by the FDA and therefore subject to requirements for submission of promotional material.  

The FDA also offers specific recommendations for providing information about investigational drugs or devices to payors and others. This is important because information about investigational products “may help payors plan and budget for future coverage and/or reimbursement decisions.”  

This guidance states that the FDA does not intend to object to the following types of information about investigational products: (1) product information; (2) information about the indication sought; (3) factual presentations of results from clinical or preclinical studies; (4) anticipated timeline for possible FDA approval/clearance; (5) product pricing information; (6) marketing strategies; (7) product-related programs or services.

The FDA recommends that firms provide the following alongside any information describing investigational drugs or devices: (1) a clear statement that the product is under investigation and that the safety or effectiveness of the product has not been established; and (2) information related to the stage of product development. The FDA also recommends that firms update payors and others as information on investigational drugs or devices becomes outdated.

Insights and Analysis 

This guidance is particularly helpful now, given the uncertain and shifting healthcare market. Healthcare costs and insurance premiums played a prominent role in last year’s presidential campaigns. Now, following the election, the current administration has indicated its intention to replace the Affordable Care Act. This has injected increased uncertainty into the insurance marketplaces and may motivate formulary committees, managed care groups, payors, and others to focus even more on cost effectiveness. Sharing HCEI with these groups is particularly important. As a result, this guidance holds unique significance at this moment.  

By following the guidance, manufacturers can benefit from the FDA’s newfound flexibility on this issue. However, there are two important limitations for presenting HCEI. First, HCEI may only be presented to audiences who have “knowledge and expertise in the area of health care economic analysis.” This does not include health care providers making individual prescribing decisions or consumers. Second, any HCEI presented should be “based on competent and reliable scientific evidence,” often abbreviated as CARSE. 21 U.S.C. § 352(a). The FDA interprets this statutory standard as “developed using generally-accepted scientific standards, appropriate for the information being conveyed, that yield accurate and reliable results,” a flexible standard that relies on “substantiation [practices] developed by authoritative bodies.” Fortunately, the FDA applies the CARSE standard to all components of HCEI including clinical outcomes, i.e., data describing the safety and/or efficacy of a drug or device, which the FDA previously suggested would have to meet the much higher standard of “substantial evidence.”  

Under the FDA’s interpretation of CARSE, it will consider any studies or analyses done using “current good research practices” employed by what it calls “authoritative bodies,” such as the International Society for Pharmacoeconomics and Outcomes. In other words, if a credible organization employs contemporary research practices to conduct an analysis, it will likely satisfy the FDA. This further demonstrates the FDA’s newfound flexibility when it comes to communicating HCEI. 

But perhaps the most revealing element of this guidance is the FDA’s willingness to permit manufacturers to share information about investigational products. FDA regulations prohibit firms from promoting investigational devices, and from marketing investigational drugs as safe and effective.  21 CFR 812.7(a); 21 CFR 312.7(a). Yet, under this new draft guidance, the FDA permits firms to share limited information about investigational products.  In the current environment where predicting future costs and drug pricing can be beneficial to a formulary committee or HMO, learning even this limited information about the kinds of drugs and devices that are in the approval pipeline can be helpful.     

IV. Concluding Thoughts 

While we recommend that manufacturers continue to proceed with vigilance when it comes to promotional communications, these two draft guidance documents demonstrate the FDA’s willingness to allow broader manufacturer communications and promotion in certain areas. The FDA still has not issued guidance on off-label communications, and these actions may simply reflect an effort by the FDA to memorialize some guidance before it is revisited by the new administration. But, at the very least, these actions are a clear acknowledgement of the significant benefits of increased truthful and non-misleading communication between manufacturers and consumers, and they demonstrate that the FDA appreciates the First Amendment issues raised by recent cases including Caronia and Amarin


1 But as the Ninth Circuit in U.S. v. Harkonen reiterated, “the First Amendment does not protect fraudulent speech.”  510 F. App'x 633, 636 (9th Cir. 2013).  In Caronia, the defendant’s off-label promotion was protected by the First Amendment because it was considered truthful.  But in Harkonen, the defendant was allegedly engaged in promoting misleading information with “the specific intend to defraud,” and as a result, his communication was not protected. Id. at 637.

*O’Melveny recognizes law clerk Aaron Shapiro for his valuable contribution in researching and drafting this article.

This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. Ross B. Galin, an O'Melveny partner licensed to practice law in New York, David L. Kirman, an O’Melveny partner licensed to practice law in California, and Seth S. Ray, an O'Melveny senior counsel licensed to practice law in Washington, DC contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.

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