Life with PIE: Why the Pre-Approval Information Exchange Act is a Pivotal Moment Between Payers and the Biopharma and Device Industry.

It’s widely known that biopharma’s commercial speech is highly regulated. These regulations exist to prevent biopharma and biotech manufacturers from promoting products without a clear demonstration of efficacy and safety from well-controlled trials or equally high-caliber evidence. Regulations and FDA guidance documents define the specific parameters under which a biopharmaceutical company or device manufacturer can communicate about its products.

Compliant Drug Promotion is Grounded in Labelling or Substantial Evidence

There are many nuances to the rules that govern drug promotion and advertising. They get particularly complex in areas related to inquiries about off-label uses made by the medical community and/or indications under investigation that have not yet been approved. In general, the FDA-approved drug label enables companies to disseminate promotional messaging and education. Beyond that, substantial evidence must be generated to support any other promotional claims and the bar for that evidence is very high. Sponsors who promote under the substantial evidence construct risk FDA disagreement that the evidence underlying their claim is sufficient which can result in enforcement actions from warning letters to debarment, seizures, recalls, and civil penalties.

Misbranding or the inappropriate promotion of a drug or device consists of many behaviors that amount to making unsubstantiated claims about a product’s efficacy, failures to properly communicate safety information and promotion of a drug’s benefits for an indication or population without FDA approval or substantial evidence to support them.

Beyond Clinical Evidence – the Payor Value Proposition

Regulators use information from clinical trials to make decisions about new drugs (investigational new drugs). Payors also use clinical evidence to evaluate the therapeutic benefit of a new agent but they also require economic information that is not evaluated as part of the FDA the approval pathway. Section 114 of the Food and Drug Modernization Act (FDAMA)?allows drug manufacturers to provide economic information modeled from trials. The 2016 21st Century Cures Act advanced the use of real-world data to support ongoing conversations about real-world value to payors and other risk-bearing entities. Still, one of the bright lines that biopharmaceutical companies could not cross was the proactive discussion or promotion of investigational products prior to FDA approval. Pharmaceutical companies and device makers can respond to a customer’s unsolicited requests about unapproved drug indications but pharma has had no pathway to proactively inform parties about an investigational new drug and could not supply the information required for payors to conduct a full clinical and economic evaluation of its value.

The challenge with this restriction is that health plans and other risk-bearing entities did not have sufficient time to anticipate the arrival of new therapies. Payors need to undertake multiple complex analyses including evaluating the existing unmet need and cost burden of a given disease, assessing the clinical and economic benefit, and forecasting its impact on their budget. These efforts can take 12-18 months to complete in time for their budgeting cycles. As a result, payors either heavily restricted access to a new agent or blocked it for at least 6 months before issuing a medical policy or placing it on its drug formulary.

In December 2022 the “PIE Act” was signed into law by President Biden. Section 3630 of H.R. 2617 entitled, “Facilitating Exchange of Product Information Prior to Approval” of the Consolidated Appropriations Act, 2023, made two remarkable changes to regulations historically prohibiting biopharma from proactively communicating about a drug not yet approved by the FDA.

First, the law explicitly states that proactively providing information to a payor or other formulary decision-makers about an investigational new drug prior to FDA approval is no longer a form of misbranding. The removal of FDA approval prior to commercial communication is unprecedented and clears the way for industry to communicate with payors more effectively than ever before.? The law spells out the types of communications to formulary decision-makers which can include information about registration trials, anticipated indications, pricing information, utilization projections, product-related programs and services, and actual study results. The second notable change is that this legislation applies to device manufacturers and biopharma so both can take advantage of this clear path to communicating with risk-bearing entities in advance of FDA’s approval.

There is already some early data suggesting that engaging formulary decision-makers prior to FDA approval can lead to more favorable formulary placement and medical policies governing access to new drugs. For patients, this means the therapy or device that could improve their lives is closer to becoming available to them. For biopharma and device makers, this suggests that engaging payors as early as a year or more before their anticipated new drug or device approval is critical. Doing so will shift the timing and speed of payer engagement and hopefully improve the likelihood that a much-needed therapy will reach patients a little faster.

This sweeping change has broad implications for the biopharma and device launch planning and budgeting process, pushing up the timeline for key market access activities which can include payer advisory boards, mock P&T committees, pricing, rebating, and VBC modeling, the AMCP dossier, utilization forecasts, budget impact models and more. Overall these developments are positive, but brand teams must be staffed and budgeted to take advantage of the extra time and activities they can undertake.

The PIE Act is an incredible milestone in the evolution of biopharma and device-maker relationship-building with payors. A hopeful outcome is that payors and the life sciences industry have deeper more relevant exchanges about value. The best outcome would be accelerating access to interventions that promise to improve patients’ lives.

* In the name of transparency, I am not a practicing attorney and no one should rely on my interpretation of regulations and FDA guidances. My opinions do not constitute legal advice. Please seek out legal counsel from attorneys practicing in the domain of biopharmaceutical and device manufacturer commercial speech before taking any actions related to the advertising promotion, or discussion of any drugs or devices.