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FDA Issues Draft Guidance on the Promotional Practices of Pharmacy Benefit Management Companies

January 5, 1998
Food and Drug Administration (FDA),U.S. Department of Health

The Food and Drug Administration today published a draft guidance concerning promotional practices by pharmacy benefits management companies (PBMs) and similar enterprises that are owned or influenced by the sponsors of medical products.

Today's Federal Register carries a notice of the availability of this draft guidance. The draft guidance describes FDA's regulatory authority under the Federal Food, Drug and Cosmetic Act over the promotional practices of this growing number of PBM/medical product sponsor ventures.

"Today's proposal will help FDA keep pace with changes in the promotion of medical products, said FDA Lead Deputy Commissioner Michael Friedman. "While PBMs can be useful tools for managing health care costs, FDA wants to ensure that patients are not put at risk by improper marketing practices." Medical product "switching" -- the substitution of one therapy for another as result of financial incentives -- is one area of concern regarding the growing trend toward drug and device sponsor ownership or partnerships with PBMs and other health care organizations. This practice could have serious health implications for patients -- particularly for those dependent on chronic therapy -- if medical decisions are influenced by incorrect or misleading information.

Concerns about drug switching and other potentially harmful promotional practices have come to light as a result of several in-depth analyses of PBM involvement in medical decision making, conducted by FDA, the Health Care Finance Administration, and the Department of Health and Human Service's Office of Inspector General. In addition, FDA has sponsored a major public hearing and issued a notice in the Federal Register seeking public comment on this issue.

After thoroughly reviewing these analyses and comments, the agency has developed this draft guidance that includes the following factors for determining whether a medical product sponsor can be held responsible for the promotional activities of a nonsubsidiary PBM that violate the Federal Food, Drug and Cosmetic Act: The Relationship of the Sponsor and the PBM/ The nature and extent of a PBM's ties to a medical product sponsor.

Sponsor Control or Influence over the Information Content and Distribution Provided by PBMs/ The role medical product sponsors may play in assisting PBMs in promotional activity.

FDA is seeking public comment on this proposal over the next 90 days and these comments will be considered in the development of a final guidance. Written comments may be submitted to: Dockets Management Branch (HFA-305) Food and Drug Administration 12420 Parklawn Drive, Rm. 1-23 Rockville, MD 20857 ##### ATTENTION TV BROADCASTERS: Please use open caption for the hearing impaired.

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