It’s FDA Approved! But is it Ready for My Coverage Policy?

Posted by The Evidence Blog on June 22, 2016

The Hayes Client Symposium is just about 3 months away and we’re busy preparing our accredited sessions for our health plan clients who will be in attendance. I’m personally excited to be part of the session focusing on the FDA approval process and the impact this has on coverage policy. This is always a hot topic for our health plan clients.

Some background about the FDA:
The Food and Drug Administration (FDA) can trace its origins as a federal consumer protection agency to the passage of the 1906 Pure Food and Drugs Act. The 1906 Act was passed in response to public outrage at the startlingly unsanitary conditions in the Chicago meatpacking industry described by Upton Sinclair in his landmark book, The Jungle.

Although the FDA regulated drugs from its earliest years, in the fall of 1937, there were more than 100 deaths associated with use of the “Elixir of Sulfanilamide” (manufactured by a small drug company in Bristol, Tennessee). To answer consumer demand for a liquid formulation of this early antibiotic, the manufacturer had dissolved the sulfanilamide in diethylene glycol. Without conducting toxicity testing (not then a requirement of the drug development process), 240 gallons of the drug were produced and distributed without anyone taking note of the fact that diethylene glycol (the active agent in antifreeze) was a deadly poison if consumed orally. This tragic event ushered in the modern era of drug approval and regulation, and hastened the 1938 passage of the Federal Food, Drug, and Cosmetic Act—the statute that remains the basis for FDA regulation of medications to this day.

Great! So today, if it’s FDA approved, it’s ready for the market, right?

With the current regimen of drug testing in mind, most people think of FDA approval as being the sine qua non of testing to establish safety and efficacy of new health-related products. There is the mistaken notion that all FDA approvals involve the same degree of rigor as that associated with new drug development. However, differing FDA regulations govern the approval of generic drugs, medical devices, biologics, and orphan drugs.

For instance, do you know the standard used to regulate the intent to market a new class 2 medical device under a 510(k) clearance? A 510(k) clearance is a premarket submission made to the FDA to demonstrate that the device to be marketed is at least as safe and effective as—that is, substantially equivalent to—a device that was legally marketed prior to May 28, 1976. Under the 510(k) clearance standard, the requirement for clinical trials to demonstrate safety and efficacy are much less stringent.

During our Client Symposium this September in Philadelphia, we’ll dive deeper into this subject and address how FDA approvals impact the coverage policies you are developing. During this session, we’ll explore the different FDA approval processes, including:

  • New Drug Applications (NDA)
  • Abbreviated NDA and the bioequivalence rating system
  • Medical devices introduced under the FDA 510(k) clearance process
  • Biologics, biosimilar, and orphan drugs

If you are a health plan client of Hayes, join us in Philadelphia for an educational and interactive day, during which we will review not only the FDA approval process, but also discuss specialty drugs and genetic testing. The full agenda of the Hayes Client Symposium and access to registration is available at:


2016 Client Symposium

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