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E1 – How 21st Century Cures May Impact Health Plans in 2017

​Transcript

Jay: My name is Jay Jackson, I am on the Reimbursement and Market Access team here at Avalere, and today we are going to discuss the 21st Century Cures Act, which was signed into law by President Obama on December 13th.

The final signing of the Act is the culmination of nearly three years of efforts by lawmakers in the House and Senate, which saw several iterations of the legislation. Cures is intended to accelerate the discovery, development, and delivery of drugs and medical devices.

The provisions related to discovery and development span a range of issues to help bring products to market faster.

The Act provides for significant funds for NIH to continue the Precision Medicine Initiative, Cancer Moonshot, and the BRAIN Initiative.

To help streamline clinical trials, Cures encourages the expanded use of FDA’s Drug Development Tool program, which could help standardize endpoint or outcome measurement across trials. The law also encourages expanded use of next-generation trial design, using tactics such as prospectively-planned adaptive design that can help end trials faster when positive results are detected. Cures also requires FDA to establish a framework for the use of real-world evidence, such as data gathered from registries or medical claims, with the intention of increasing the number of diseases individual products can treat, to the extent that they are safe and effective. The Act does not change the basic safety and effectiveness requirements for approval at FDA.

To help streamline the regulatory review process at FDA, Cures enacts a number of agency reforms. It is intended to help FDA attract and retain staff to fill what the agency says are around 600 vacancies. The Act also includes reform for combination products and medical devices, by enabling increased communication with combination product sponsors and expanding such policies as breakthrough review for medical devices, which FDA calls the Expedited Access Pathway. Cures also requires FDA to provide clarity on how sponsors can incorporate data about patient experiences with their products into their regulatory submissions. Incorporating the patient viewpoint will gain importance as patient-desired outcomes become more integrated into value-based payment programs.

Cures also affects how medical product manufacturers can communicate with payers. It clarifies and expands FDAMA 114, a piece of existing statute that allows manufacturers to discuss the economic impact of their products with certain healthcare decision makers. The final iteration of the Act, however, does not include a requirement for additional clarity through guidance from FDA, a key component necessary to allow the continued proliferation of sophisticated value-based healthcare decision making processes such as outcomes-based contracting. FDA is currently working with patients, industry, and payer stakeholders to update its evidence communication policies.

Cures allocates $4.8 billion for NIH and $500 million for FDA over ten years in order to fund these activities. However, most of the funds – with the notable exception of some funds intended to combat opioid abuse – still must be appropriated through the budgeting process. Depending on Congressional priorities, this may affect future inflationary increases to NIH’s budget, or may leave FDA underfunded to accomplish the many mandates in the Act.

Avalere sees many points of engagement for the biopharmaceutical and medical device industries as the next steps in implementation and rulemaking play out. User Fee legislation in the summer of 2017, through which FDA receives about half of its annual funding, may be affected by Cures appropriations or lack thereof. Congress may also take that opportunity to include provisions not included in Cures in either User Fee or standalone legislation. Given the amount of regulation or guidance required by Cures, stakeholders will also have ample opportunity to interact with FDA and CMS through meetings and comment dockets. Provisions not included in the final Cures Act may also signal future policy action around Right to Try, drug pricing, and other areas that will require attention in 2017.