Compare and Contrast with Clarity: The FDAMA 114 Rules of Engagement

  • by: |
  • 10/15/2012

Per a new PhRMA white paper, FDA guidance on the supporting evidence drug companies need for the health care economic data they send to formulary managers should specifically allow for use of a range of data sources, not limited to adequate and well-controlled clinical trials.

The white paper urges the agency to develop formal regulatory guidance on Sec. 114 of the FDA Modernization Act of 1997, which allows drug companies to proactively disseminate health care economic information to formulary committees within certain limitations.

In the 15 years since FDAMA was passed, FDA has yet to issue formal guidance on Sec. 114. As a result, “many biopharmaceutical companies are reluctant to engage in these communications,” PhRMA points out, and “the promise of FDAMA Sec. 114 has not been fully realized.” A recent analysis of FDA enforcement actions over the past 10 years supports the premise that drug companies have been slow to engage in promotional activity under Sec. 114.

Sec. 114 requires that economic information be supported by “competent and reliable scientific evidence,” which was intended as a more flexible standard than the “substantial evidence” standard for drug approvals, PhRMA maintains. The “competent and reliable” standard was drawn from the Federal Trade Commission’s standard for supporting promotional claims.

The white paper outlines a number of data elements that should satisfy the competent and reliable scientific evidence standard. They include: methods for establishing economic costs and consequences that are widely accepted by experts in the field using a clear, pre-defined study protocol; an “accurate and balanced assessment of the economic consequences of a drug therapy, consistent with the current weight of credible evidence”; a representative study population; and information that allows the reader to determine how the research was conducted.

PhRMA recommends that FDA allow the competent and reliable standard to be satisfied with data obtained through a number of different methods, including observational study designs, database reviews and other economic modeling techniques. “There should be no pre-specified number or type of study required to substantiate a claim."

For example, “a claim that a drug is more cost-effective than a competing drug may be made where the cost savings are due to reduced resource utilization resulting from improved efficacy outcomes, decreased administration or monitoring costs, or where the difference in cost is due to the drug causing fewer adverse events, as long as these differences are supported by competent and reliable evidence.”

PhRMA argues that FDA should not consider such a statement a comparative clinical claim, which would trigger the “substantial evidence” requirement involving clinical trials.

Companies should be permitted to disseminate data on the “real world” economic implications of a therapy on health outcomes, according to the white paper. For example, “if a manufacturer conducts a competent and reliable study investigating the impact of a drug indicated for the treatment of diabetes mellitus on costs associated with cardiovascular care, the manufacturer should be permitted to proactively disseminate such data to appropriate audiences.”


Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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