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The Trump administration has issued final guidance that allows drug companies and device makers to provide health care economic and other supporting information to payers and formulary committees, even if the information is outside of the FDA approved labeling and was not submitted to the agency in the course of product approval. This is a welcome and long-overdue development, one that raises the question of whether the agency will take steps to allow companies to provide truthful off-label information to physicians and patients in other contexts.

Health care economic and other supporting information, known as HCEI, can include clinical data or other evidence that attempts to measure or describe the economic outcomes or health consequences of using a drug or device, and may be evaluated in comparison with other health care interventions or with no intervention at all.

In April, FDA Commissioner Scott Gottlieb signaled that an expanded safe harbor was coming soon that would provide a “more robust framework” to allow companies to discuss the value proposition and health economic benefits of off-label uses. He was quoted at a presentation made to a payer group that the FDA would not want to insinuate itself into those discussions “just because it wasn’t studied in the context in which it was submitted to the agency.”


That is rather interesting, because when it comes to discussing clinical and medical information about unapproved uses with physicians and patients, the FDA’s policy for decades has been to limit companies from speaking — even if the information is truthful and not misleading. Gottlieb himself has written, in his days as a private citizen and policy advocate for the American Enterprise Institute, in support of loosening the restrictive standards imposed by the FDA’s Office of Prescription Drug Promotion and enforced by the Department of Justice.

Beginning with the threatened prosecution of the Parke-Davis unit of Pfizer over the promotion of gabapentin (Neurontin), the DOJ has secured dozens of guilty pleas and convictions under the criminal provisions of the Food, Drug, and Cosmetic Act and the False Claims Act that have resulted in billions of dollars in fines. However, a 2012 U.S. Court of Appeals decision that tossed the conviction of sales consultant Alfred Caronia for alleged off-label promotion, and a subsequent U.S. District Court case involving the small biopharmaceutical company Amarin, has cast doubt on whether the government’s regulatory authority is compatible with the First Amendment’s guarantee of free speech.


When it comes to off-label discussions with payers, the FDA’s final guidance now permits candid exchanges that will help facilitate coverage and reimbursement for unapproved products and unapproved uses of approved or cleared products. This is a significant change. The guidance lets companies disclose and discuss with payers certain categories of information, such as unapproved but clinically appropriate indications, pricing, and study results that before would have been considered off limits. Allowing these discussions to this extent represents a sea change in policy and makes it far more likely that patients will receive the right drug at the right time to treat their condition.

Further, and perhaps most important, these discussions may well support the collective goal of obtaining the best value for the medicine in question. Ken Frazier, the CEO of Merck, among others, has been a consistent voice for some time in pressing the FDA to allow drug companies to include off-label information about their products as a more effective way to negotiate outcomes-based or value-based agreements with payers.

Apparently, the political imperative of maximizing value for prescription drugs is now so great that it has the power to override decades of intransigent FDA policy on off-label discussions.

If drug or device manufacturers want to provide information to payers about unapproved uses, the FDA recommends that they give payers a prominent statement disclosing the approved or cleared indication(s) along with a copy of the current product labeling. If companies follow the recommendations set out in the guidance, the FDA will neither object to off-label communications with payers nor use them as evidence of a new “intended use,” which has been the basis of off-label enforcement actions over the past two decades.

Does this relatively permissive new guidance suggest that the FDA is willing to allow a fuller extent of off-label communication? Remember that, despite the recent court cases that challenged the agency’s long held views, the only off-label communication allowances that have been (more or less) acknowledged by the FDA to date let manufacturers distribute peer-reviewed journal articles and other medical publications, respond to a physician inquiry, or engage in genuine scientific exchange.

In issuing the guidance, the FDA acknowledges that payers are a “sophisticated audience” with the “financial resources and motivation to closely scrutinize information about medical products as part of their decision-making process.” It’s fair to conclude that the average physician simply does not have the time or equivalent resources to examine clinical study data in depth and make prescribing decisions with the rigor and sophistication that payers and formulary committees make on a daily basis. Nevertheless, we can envision five scenarios in which off-label information could be disseminated more freely in the course of reconciling the FDA’s regulatory authority with the First Amendment’s protection of commercial speech.

First, as suggested by researchers with the Duke-Margolis Center for Health Policy, the FDA could sanction a third-party advisory body to determine whether the clinical evidence or other information is truthful and not misleading. This would have the flavor of a peer-review session, and some believe this body could be structured in way to act outside of the government and therefore be immune from First Amendment challenge.

Second, the FDA could establish an alternative regulatory pathway that would allow companies to submit information that, unless the agency objects because it deems the information to be false or misleading, could be disseminated without legal risk. This would be similar to the settlement agreed to by the FDA and Amarin. It is unclear whether companies would take this on as a routine matter, and it’s also unclear whether FDA would object frequently or just use it as a vehicle to restrain charlatans.

Third, the agency could flesh out its regulatory guidelines and definitions, as suggested by the industry supported Medical Information Working Group. This group has engaged with the FDA for years and has called for it to formally issue guidance that would retain the agency’s role in approving products and product communications, but revise three operative definitions: what constitutes “labeling,” what activities would suggest that a manufacturer is establishing a new “intended use,” and what is the scope of permissible “scientific exchange.” If the FDA clarified these terms, it would go a long way to helping companies understand what they can do to discuss truthful information about unapproved uses.

Fourth, Congress could act to pass legislation that allows companies to communicate more freely and/or limits the FDA’s regulatory prerogative. This was debated in the House Energy and Commerce Committee as part of the 21st Century Cures legislation, but a section contained in an earlier draft of the bill was deleted. With the recent success of the libertarian Goldwater Institute in leveraging state legislative action to spur congressional passage of a federal right to try law, they could play the same role in the off-label area.

Fifth, the First Amendment’s protection of commercial speech that was recognized as limiting the prosecution of a pharmaceutical sales representative in the Caronia ruling could be embraced by other circuits or, for national effect, by the U.S. Supreme Court. This would dramatically curtail the FDA’s ability to limit company communication of any truthful off-label information.

This area of the law remains convoluted, but it has important implications for the practice of medicine and the determination of payer coverage. The legal and regulatory framework needed to allow companies to communicate truthful and non-misleading speech must be reconciled by the FDA, lest it find that Congress or the courts have done it for them.

John Osborn is a senior advisor with Hogan Lovells and a visiting scholar at the UCLA Fielding School of Public Health; he formerly served as general counsel of Cephalon and US Oncology. Seth Ray is a senior counsel with O’Melveny & Myers; he formerly served as Associate Deputy Chief Counsel for Drugs and Biologics in the Office of the Chief Counsel of the Food and Drug Administration.