Last Wednesday, the U.S. House of Representatives passed the 21st Century Cures Act , the culmination of an extensive, multi-year effort by the House Energy and Commerce Committee to develop this sweeping legislation. The 21st Century Cures Act now faces a vote in the Senate, likely within days. The White House has already expressed support for the bill, so assuming it passes in the Senate, it is very likely to become law. Among the numerous provisions of this voluminous bill, Section 3037 expands the permissible scope of drug manufacturers’ promotion of health care economic information (HCEI).

Current statutory provisions for promotion of HCEI

Currently, the misbranding provision of the Federal Food, Drug, and Cosmetic Act provides, in Section 502(a), a limited safe harbor for a manufacturer’s communication of HCEI. Specifically, a drug’s labeling shall not be considered false or misleading if HCEI is:

  • Provided to a formulary committee, or other similar entity, in the course of selecting drugs for managed care or other similar organizations;
  • Directly related to an approved indication; and
  • Is based on competent and reliable scientific evidence.

The current provision defines HCEI as “any analysis that identifies, measures, or compares the economic consequences, including the cost of the represented health outcomes, of the use of a drug to the use of another drug, to another health care intervention, or to no intervention.”

In the 19+ years since this safe harbor was established through the Food and Drug Administration Modernization Act of 1997, the U.S. Food and Drug Administration (FDA or Agency) has declined to interpret its key provisions. Moreover, through enforcement letters and public statements by Agency officials, the Agency has telegraphed that promotion of HCEI that makes an implied or direct clinical claim that is inconsistent with a product’s approved labeling could be regarded by the Agency as misbranding the drug. As a result, manufacturers have been wary of proceeding with HCEI communications under this safe harbor.

How the 21st Century Cures Act would change the standards for promotion of HCEI

Section 3037 of the bill would modify all three criteria for the safe harbor, as follows:

  • With respect to the audience, the bill provides that manufacturers may promote HCEI to payors, in addition to formulary committees and other similar entities; however, all of these entities must have “knowledge and expertise in the area of health care economic analysis” and must be “carrying out [ ] responsibilities for the selection of drugs for coverage or reimbursement”;
  • Regarding the relationship between HCEI and a product’s FDA-approved indication, the bill loosens the requirement that HCEI must be directly related to an approved indication; rather, it is sufficient if HCEI “relates” to an approved indication; and
  • The bill leaves unchanged the evidentiary standard for HCEI—i.e., competent and reliable scientific evidence—but requires that where applicable, the HCEI must be accompanied by a “conspicuous and prominent statement describing any material differences” between HCEI and a product’s approved labeling.

In addition, the bill expands the scope of health care economic information (HCEI) that is eligible for the safe harbor. Whereas the current definition of HCEI is limited to an analysis, the bill’s definition of HCEI also includes the “clinical data, inputs, clinical or other assumptions, methods, results, and other components” of the analysis. The definition also specifies that HCEI could be based on the economic consequences of the separate or aggregated clinical consequences of the represented health outcomes. Finally, the bill’s definition of HCEI describes the outer bounds of the extent to which HCEI may be inconsistent with a drug’s FDA-approved labeling—i.e., the definition of HCEI excludes any analysis that relates only to an unapproved indication.


The 21st Century Cures Act would expand the HCEI safe harbor to allow manufacturers to promote HCEI that includes, or is based on, data or information that is not in FDA-approved labeling, as long as the analysis, data or information “relates” to an approved indication and appropriate disclaimers accompany the presentation. This expansion of the safe harbor may provide welcome relief to manufacturers. Allowing HCEI to incorporate data and information beyond the four corners of FDA-approved product labeling better reflects the practical realities of many sources of health economic data, which often do not map neatly and exclusively to approved uses or endpoints. The expansion of the safe harbor also would allow manufacturers to more freely address decision-makers’ demands for HCEI that reflects actual clinical practice and clinical outcomes that drive health care decision-making, rather than the specific contexts studied in clinical trials to obtain FDA approval.

The bill also appears to refute FDA’s historical enforcement approach of objecting to certain health economic claims because the agency regarded them as implying clinical claims, and therefore requiring substantial evidence for support. By making clear that clinical data, inputs, or other assumptions may be included in HCEI, the bill could assuage manufacturer concerns that claims intended to convey a product’s value will be viewed by the agency as impermissible clinical claims.

The bill does not, however, shed light on the uncertainty that has swirled around the meaning of “competent and reliable scientific evidence”, nor does the bill instruct FDA to issue guidance to clarify this and other aspects of the safe harbor provisions. Other potential areas of ambiguity are the factors for determining whether or not HCEI “relates to” an FDA-approved indication, and whether or not there are any “material differences” between HCEI and a product’s FDA-approved labeling. Determinations of relatedness and materiality can be inherently subjective and without further guidance from FDA, manufacturers may be inclined to over-disclaim or to hold back from utilizing the expanded safe harbor until the Agency’s interpretation of these provisions becomes more clear through enforcement actions or otherwise.

Finally, these provisions do not address certain points that many stakeholders had sought. For example, the exclusion of analyses relating solely to an unapproved indication seems to foreclose the ability to engage in HCEI discussions about pipeline products prior to approval. Also, the proposed audiences for HCEI appear to preclude manufacturers from proactively discussing HCEI with certain entities (such as ACOs, IDNs, or groups developing treatment pathways or guidelines) that often factor economics into their decision-making, but do not make “coverage or reimbursement decisions” per se.

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Overall, the 21st Century Cures Act is poised to make important updates to the legal framework for promotion of HCEI. More efficient exchange of HCEI between manufacturers and decision-making entities seems particularly important now, given the harsh and critical spotlight that has been cast on the value of drugs and biological products. At the same time, the bill leaves several key aspects of the legal framework in outline form, and further “coloring in” by FDA may be needed for this revised framework to reach its full potential.