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FDA/CMS Parallel Review of Medical Products Limited Only by Sponsors' Reluctance, CMS Official Says


Originally published Dec. 5.

By Turna Ray

Although players in the drug and diagnostics industries have often extolled the benefits of simultaneous regulatory and reimbursement review for medical products, sponsors have so far shown resistance to such a model when provided with the opportunity, according to an official with the Centers for Medicare & Medicaid Services.

"There is nothing that prevents [parallel reviews] from happening right now, other than the reluctance of sponsors to tell [the US Food and Drug Administration], 'We would like for you to invite CMS to our meetings,'" Louis Jacques, director of CMS's coverage and analysis group, said last month at a conference in Washington, DC, hosted by the Institute of Medicine. "That's the only impediment."

Jacques made these comments while discussing a medical device "parallel review" pilot that CMS and the FDA launched in October. Under the pilot program, the two agencies plan to coordinate regulatory and Medicare coverage reviews for up to five "innovative" devices per year. Based on the criteria set out for devices that would be eligible for the parallel review process, molecular diagnostics intended to personalize treatments may be potential candidates for the pilot (PGx Reporter 10/12/2011).

So far, molecular diagnostics firm Exact Sciences has said it will take advantage of the FDA/CMS parallel review process for its Cologuard DNA-based colon cancer screening test. Exact plans to file a premarket approval application with the FDA in the fourth quarter of 2012, at which point CMS will conduct its national coverage assessment for the test.

While the parallel review pilot stands to offer diagnostic firms a formal pathway through which they can gain regulatory approval and reimbursement coverage for tests in rapid succession, CMS has already been open to attending drug and test makers' regulatory meetings with the FDA at the sponsors' request, on an informal basis. However, few have jumped at this chance, according to Jacques.

"When we have made the offer [to conduct parallel reviews] for drugs, devices, and diagnostics … the reaction I get is a polite 'Yes,' but a somewhat guarded 'Yes,'" he reflected. "The only conclusion I've drawn from that is it's kind of like when you tell your mother that you're at the library but you tell your father you really went to Cancun on spring break. You don't really want them talking to each other."

One oft-cited barrier to CMS and FDA conducting parallel reviews of medical products is that the two agencies have different congressionally mandated charges. FDA is responsible for ensuring that medical products are "safe and effective," while CMS ensures that medical interventions are "reasonable and necessary" for the Medicare population. These separate mandates result in divergent evidentiary requirements, which drug and diagnostics firms may not be able to gather at the same time.

Meanwhile, some in industry have long urged the two agencies to work together on a parallel review scheme, hoping it would align their evidentiary requirements for medical products, which in turn would reduce regulatory and reimbursement uncertainty and help speed innovative drugs and tests to market. Developers of personalized medicine products – which often involve the codevelopment and marketing of a drug and companion test – may be particularly keen to try out the FDA/CMS parallel review pilot because regulatory and reimbursement policies are currently in flux for such products.

The FDA has said that under most circumstances it prefers to review and approve drug and test combination products at the same time. However, the agency is still practicing "enforcement discretion" over laboratory-developed tests, which means that FDA-approved companion diagnostics often compete with lower-cost LDTs that haven't been green-lighted by the FDA. The availability of LDTs hampers the adoption of more expensive FDA-approved kits, since there is currently no way to mandate that doctors use the FDA-approved companion test for a personalized drug.

Furthermore, current coding methodologies make it difficult to differentiate between FDA-approved tests and LDTs in medical claims. To gain greater insights on what insurers are paying for, some private payors, such as Humana, are beginning to instate prior authorization schemes to ensure that patients receive a personalized drug only after a companion test has been performed. However, payors are not tracking whether labs are running the FDA-approved test kit or an LDT as well as they'd like to, Louis Hochheiser, Humana's medical director of clinical policy development, recently said at a conference hosted by Partners Healthcare Center for Personalized Genetic Medicine in Boston.

Meanwhile, CMS is beginning to request information on the regulatory status of tests in medical claims through a molecular diagnostic reimbursement program being administered by Medicare contractor Palmetto GBA (PGx Reporter 11/16/2011). The government payor is also exploring ways it can apply coverage-with-evidence-development schemes to reimburse for tests while sponsors conduct additional studies on how their diagnostics impact patient outcomes.

Since personalized medicine products often involve the use of innovative technologies for which there is a high level of regulatory and reimbursement uncertainty, developers of such treatments could particularly benefit from the FDA/CMS parallel review pilot by gaining greater clarity on the types of evidence they need to provide healthcare decision makers.

According to Sean Tunis, CEO of the Center for Medical Technology Policy, the FDA/CMS parallel review project will serve industry not so much by spurring more simultaneous reviews, but by shedding light on the different expectations of the two agencies.

"What I don't think [the parallel review pilot] is going to lead to very often is harmonized or identical evidence expectations," Tunis, who at one time was chief medical officer at CMS, said at the IoM meeting. "It will lead to more predictability and more clarity about [how] studies need to be designed to address the information needs of the regulators and what additional information in other populations might be helpful to have in terms of reimbursement decisions."

CMTP, the non-profit Tunis currently heads, aims to improve the design of prospective, real-world studies for new technologies with input from researchers, doctors, patients, industry, and payors. At the IoM conference, Tunis advocated an adaptive regulatory and reimbursement model for molecular diagnostics.

For example, under FDA's accelerated approval scheme for drugs, pharmaceutical firms are allowed to market treatments based on early clinical data, with the stipulation that they will submit more complete evidence on these drugs in the post-market setting. Tunis proposed a similar system for molecular diagnostics in which the agency could provide early approval based on specific evidence thresholds and require that the company submit additional data to heighten the regulatory status of the test.

On the reimbursement side, Jacques observed that CMS, through its coverage-with-evidence-development program, can also be more flexible in how it pays for tests based on the level of evidence available for products at different times in their life cycle. In a white paper published by the Urban Institute in September, Tunis and colleagues recommend that CMS promulgate policies that enable "coverage with conditions," which would allow the agency to pay for products for very select populations or in specific settings where the intervention improves patient outcomes.

As FDA and CMS separately promulgate new regulatory and reimbursement regulations for molecular diagnostics, the parallel review pilot may help the agencies ensure that they are advancing guidelines and policies that aren't conflicting or redundant.

"That's actually going to be the most helpful outcome of the whole parallel review process — the opportunity for those two agencies to have some specific discussions on particular topics and start to clarify for themselves, but also for the outside world, what's the difference between 'safe and effective' and 'reasonable and necessary,'" Tunis said.

Jacques noted that after running the pilot for a few years, the two agencies will likely release a joint roadmap that will serve as a guide to sponsors interested in pursuing parallel review. He emphasized, however, that joint FDA/CMS review, even if it is rolled out as a permanent program beyond the pilot phase, will always be voluntary for industry.

"To do parallel review with a reluctant sponsor is probably not a productive use of our time," Jacques said, noting that CMS doesn't have sufficient resources to conduct parallel reviews on a broad scale.

Alberto Gutierrez, director of the Office of In Vitro Diagnostics in FDA's Center for Devices and Radiological Health, agreed with Jacques's sentiment that parallel reviews will likely remain a voluntary and modest effort.

The FDA reviews a lot more products at a greater pace that CMS does because "our bar, to a certain extent, is lower in terms of clinical validity," Gutierrez said at the IoM meeting. "Some of those [sponsors] don't have the data or would not want to collect the data at the time [of regulatory approval] for what it would require for CMS approval. So, for [sponsors that] aren’t ready, having CMS there would be a waste of their time."

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