In the United States, two federal regulatory agencies are primarily responsible for the complex and important mandate of approving drugs for the marketplace and authorizing payment for them. Through the evaluation of information submitted to the agency, including clinical trial data, the Food and Drug Administration (FDA) ensures that drugs are “safe and effective” and that biologics meet the standard of “safety, purity, and potency.” The Centers for Medicare & Medicaid Services (CMS) administers the Medicare and Medicaid programs and, with respect to Medicare beneficiaries, determines if coverage for a product is “reasonable and necessary.”
The FDA’s scientific mandate allows it to intensely evaluate the technical aspects of drug development and safety. The agency does not consider payment or coverage issues. After the FDA has determined that a product can be brought to market, CMS must determine whether Medicare and Medicaid should cover and pay for it.
This policy brief lays out practical, bipartisan, and achievable steps for FDA and CMS to improve their collaboration with each other and with stakeholders. Because FDA and CMS are both agencies within the Department of Health and Human Services (HHS), the two share natural connections despite their different missions. The larger goal of enhanced agency collaboration is to provide access to safe and effective therapies to beneficiaries promptly while meeting CMS’ statutory requirements.
The following recommendations are designed to improve the information disparity between FDA and CMS by establishing a more balanced flow of information that fosters collaboration. Significantly, a majority of the policy recommendations do not rely on Congress to modify the existing statutes governing these agencies. Considering the complex, emerging challenges and the rapid pace of scientific advancement, CMS and FDA should actively coordinate messaging and decisions. The recommendations are not intended to alter statutory roles of the two agencies or adjust any of the current processes for approval or coding, coverage, and payment. Rather, the recommendations are focused on ensuring that CMS has timely information from FDA so that it can subsequently evaluate the drug products and make its independent coding, coverage, and payment decisions.
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