CMS-FDA Proposed Premarket Parallel Review—The Devil is in the Details

Jayson Slotnik, JD, MPH

October 2010, Vol 1, No 5 -

On June 25, 2010, the Centers for Medicare & Medicaid Services (CMS) and the Food and Drug Administration (FDA) entered into a Memorandum of Understanding (MOU) stating that the agencies will work together to “promote initiatives related to the review and use of FDAregulated drugs, biologics, medical devices, and foods, including dietary supplements.”1 Quickly following up on the MOU, the agencies jointly published a notice on September 17, requesting comments regarding the agencies’ joint proposal to establish a process for “Parallel Review of Medical Products” (hereafter “parallel review notice”) in the premarket setting.2 These coordinated actions taken by CMS and FDA will have dramatic implications for the pharmaceutical, biotechnology, and device industries.

The CMS-FDA parallel review notice proposes a new premarket process for innovators to consider in lieu of the current staggered process. The new process, if finalized, would be completely voluntary. Currently, most innovators seek FDA approval and then, after that approval is secured, coverage, coding, and reimbursement decisions from CMS. The new process would combine these sequential events such that the innovator would have both market approval and national coverage at the end of the same process. Although superficially, this may seem to be a “good government” initiative, this proposal in fact raises many significant issues for innovators because of the new analysis that each sponsor must do on each asset, which potentially impacts the commercial viability for any given product.

Issues to Consider
The proposal states that the product sponsor will be able to decide whether or not to engage in the process, yet it also contemplates the possibility of allowing another party other than the product sponsor to be able to initiate a request for the parallel review. Will the agencies allow a competitor, for example, to ask for a parallel review? If so, how could such a system plausibly be called “voluntary”? This raises questions about what kinds of criteria the agencies will use in selecting the products for the new review system.

Additionally, and perhaps of greater concern, is the effect this process will have on clinical development. For example, should a sponsor decide not to volunteer for this process, what guarantees will be put into place that this decision will not haunt the sponsor later on? One can envision discussions with either agency questioning the sponsor for not using the parallel review process. During FDA deliberations, the agency could state that certain problems could have been avoided had the sponsor chosen the parallel review path.

The sponsor could face similar issues with CMS should the process not be used. The process envisions a positive national coverage decision (NCD) immediately or shortly after FDA approval, and the proposal states that this will expedite market uptake. It therefore seems reasonable to expect, given the tone and text of the proposal, that a sponsor ignoring parallel review should expect the year-long NCD process once the product is approved by the FDA. Ignoring the process, it seems, could easily result in significant delays caused by either regulatory agency.

Conversely, should the sponsor use this process, it will necessitate joint meetings with the FDA and CMS to discuss, among other things, clinical trial design to ascertain the information needed for both FDA and CMS approval. When negotiating a clinical trial program with the government on a new technology, how confident should the sponsor be that the representatives (particularly CMS) on the other side of the table have a good understanding of the technology, the costs and burdens of clinical trial recruitment, and the sponsor’s obligations to its investors? A firm could leave this meeting with a recipe to make a unicorn. What is the sponsor to do then?

Shifting Regulatory Goalposts
Of further concern regarding this notice is the introduction of cost and quality data into the preapproval process. As the notice states, and stated above, the agencies believe they must address a need to “speed[] consumer access to and spur development of new, affordable, reliable, safer, and more effective medical products and services” (emphasis added).2 Although this may seem like something that CMS would consider in coverage and payment decisions, it is a new concept in the realm of the FDA, which has traditionally focused on “safety and effectiveness.”

The CMS-FDA parallel review notice also suggests possible future consideration of “comparative effectiveness” as the agencies state in the notice that currently “materials submitted by manufacturers to FDA may not adequately address the issues of importance to payers . . . and the incremental clinical utility of these products compared to currently available technologies.”3 In addition, the notice describes CMS’ current NCD process as including a review of the product “as compared to alternative treatments or diagnostics already covered by the program” (emphasis added).3 Will the sponsor need to demonstrate affordability and superiority in order to gain FDA and CMS approval?

Underlying these concerns is the uncertainty about if—and if so, how— the agencies will share data and further protect confidential data between FDA and CMS as a product is reviewed.

As discussed above, the recently published CMS-FDA notice and request for comments (which are due no later than December 16, 2010) on the proposed parallel review process raises numerous and potentially significant issues for innovator companies. Should this process or something similar be finalized, it seems to me that as part of any due diligence process or clinical evaluation, one should ask why or why not the sponsor decided to volunteer or ignore the parallel review process.


  1. Memorandum of Understanding between United States Food and Drug Administration and Centers for Medicare & Medicaid Services. 75 Federal Register 48699 (August 11, 2010).
  2. CMS-FDA Parallel Review of Medical Products, Notice and Request for Comments. 75 Federal Register 57045 (September 17, 2010).
  3. CMS-FDA Parallel Review of Medical Products, Notice and Request for Comments. 75 Federal Register 57046 (September 17, 2010).