Explainer: What the updated 21st Century Cures 2.0 draft would mean for the life sciences industry

By LAURA DIANGELO, MPH, ALEXANDER GAFFNEY, MS, RAC | Jun. 23, 2021

Over a year after lawmakers released their first proposal to build on the 2016 landmark legislation, Reps. Diana DeGette (D-CO) and Fred Upton (R-MI) today released a Discussion Draft of their 21st Century Cures 2.0 proposal. AgencyIQ went through the draft legislation to identify relevant provisions for the life sciences industry, which include new data and regulatory science questions informed by the pandemic, clinical research policies and a focus on the FDA’s expedited pathways for novel products.

Background: The first iteration of the 21st Century Cures Act

The 21st Century Cures Act (21st CC)was a flagship law passed in 2016 that was spearheaded by Reps. Upton (R-MI) and DeGette (D-CO). The law was “designed to help accelerate medical product development and bring new innovations and advances to patients who need them faster and more efficiently.”

For the FDA, 21st CC meant sweeping new authorities and additional policies to design and implement. The law directed the FDA to consider the use of real-world evidence (RWE) in regulatory decision-making for medical products, expanded the use of Clinical Outcome Assessments (COAs), defined software as a medical device (SaMD) and set statutory exemptions, and authorized additional funding for the FDA to build out novel scientific and regulatory activities. It further built on the agency’s existing efforts to help expedite product development in specific areas, creating the Regenerative Medicine Advanced Therapy (RMAT) and Breakthrough Device programs.

In late 2019, lawmakers indicated that they were looking to build upon the original legislation. In November 2019, Reps. DeGette and Upton released a call for comments on their “initial vision” for a new piece of legislation, dubbed Cures 2.0. At the time, the lawmakers stated that they expected Cures 2.0 to focus more on digital health, including both market access pathways and reimbursement policies. “Recognition of digital platforms as sources of medical services combined with reforms to how digital products may be covered and reimbursed for by payers such as Medicare will be critical to realizing [these technologies’] potential.” [Read AgencyIQ’s analysis of the industry comments received on that proposal.]

By mid-2020, the proposal had been updated. In April 2020, lawmakers released an updated “concept paper” on potential priorities for new Cures legislation. By that time, the Covid-19 pandemic was a key point of concern for legislators, which was reflected in the updated proposal. The concept paper focused on increasing the use of real-world evidence (RWE) and data (RWD) to help expedite market access, and also support continued evidence generation for products with Breakthrough Therapy Designations or those granted Accelerated Approval. While digital health remained a priority, under that proposal the FDA would have been tasked with “establish[ing] regulatory alignment” between its review centers and issue guidance on how digital endpoints can be used in research programs.[Read AgencyIQ’s analysis of the April 2020 concept paper here.]

Industry has been expecting a new, formal proposal in 2021. The new Discussion Draft, released June 22, is the first legislative text of the proposed bill. Notably, the bill as designed is currently a “Discussion Draft,” which means that the text is being circulated to other lawmakers for their input and consideration. Based on their feedback, the bill may be further amended before it is formally introduced.

AgencyIQ has analyzed the discussion draft and identified sections that are likely to be relevant to regulatory professionals working in the life sciences industry. This is not an exhaustive list of all provisions contained in the draft legislation.

Title I: Public Health

This section focuses on lessons-learned from the pandemic, including novel regulatory and scientific questions.

Section 101: Further understanding the implications of long COVID

Summary: Directs HHS to conduct a national survey of patients with “Long Covid” and submit its findings to Congressional Committees. Further, directs the Department to convene “a series of virtual meetings” with health care policy stakeholders (including researchers and the life sciences industry) as part of a learning collaborative.

How it would work: The provisions are intended to understand the total prevalence of Long Covid, or a phenomenon in which individuals who have recovered from acute Covid infection continue to have lingering (often neurological) symptoms, in the U.S. As there are currently no diagnostic tests that can identify Long Covid, the survey would seek to identify individuals that “self-identify” with the condition to contextualize how they are receiving care and the types of support they may need. As evidence is still emerging on what Long Covid is, how many people are affected and the long-term implications of such a condition, the Department would build a “Learning Collaborative” to understand the scope of the issue.

Analysis: According to recent statements from CDC Director Rachel Walensky, the public health agency currently thinks that up to 20% of people may be reporting symptoms that are consistent with Long Covid. However, research in this area, including how to define and actually diagnose Long Covid, is ongoing.

This is a key priority area for not only the public health agencies, but also diagnostic and test developers.

During the pandemic, a significant portion of the total testing industry shifted to Covid-19 diagnostic and test development. However, the market for these technologies is shrinking with the increasing rates of vaccination and reduced case rates, leading to some market uncertainty for these developers. Understanding Long Covid, including the total market share and the scientific basis for diagnosing this condition is likely to be of key interest to the diagnsotic industry moving forward. While the “Sources of Coverage Survey” relies on “self-identification” of Long Covid, the industry perspective and engagement will be key for the “Learning Collaboratives.” Further, in the future diagnostic identification of Long Covid using an FDA-approved (or cleared) product will likely be foundational to coverage and reimbursement for Long Covid services. With the Congressional interest in understanding the ongoing services that this patient population may need, this could help bolster market security for Covid diagnostic developers. [Read AgencyIQ’s recent analysis, “With Covid cases dwindling, industry awaits a transition plan,” here.]

Section 102: National Strategy to prevent and respond to pandemics

Summary: Directs HHS to develop and implement a public health emergency preparedness plan, based on lessons learned from the Covid-19 pandemic.

How it would work: HHS would be tasked with developing a strategy that would “prevent and respond to” Public Health Emergency (PHE) declarations, as outlined under Section 319 of the Public Health Service (PHS) Act. At a minimum, the plan would need to include: (1) a testing strategy (including non-lab testing, such as point-of-care and other non-clinical sites); (2) data sharing and surveillance efforts; (3) a plan to mitigate drug manufacturing disruptions, “including through the use of continuous manufacturing;” (4) procedures to develop and administer vaccines, therapeutics, and other medical products; and (5) strategies to mitigate economic disruptions.

Analysis: The pandemic highlighted a series of gaps in the FDA’s (and life sciences industry’s) ability to respond to emergency situations, including a limited ability to mitigate disruptions in the supply chain, confusing diagnostic data sharing systems and the strategy to expedite vaccine access. However, the FDA has been working to get out ahead of Congressional action on future pandemic preparedness, highlighting its own wish list for future emergency readiness.

Recently, the agency’s medical device leadership (including CDRH Director Jeff Shuren and IVD division director Tim Stenzel) have published several articles outlining best-practices that they think could help avoid the challenges faced by the agency during Covid-19. In September 2020, Shuren and Stenzel published an article in the New England Journal of Medicine (NEJM) that laid out a wish list for emergency preparedness from a diagnostic testing perspective. In that article, they called for more proactive arrangements with international regulators and the use of “a small number of well-designed, well-developed, and validated tests run on common high-throughput platforms” rather than the higher number of individual tests currently in use in the U.S. Then, in March 2020, they published another article (this time in Health Affairs) that called for improvements in the non-laboratory testing landscapes in the U.S., both to support regular public health activities and emergency preparedness capacities. More recently, CDRH issued a report that reviewed the South Korean government’s response to the pandemic, highlighting the efficiencies and efficacy of that nation’s pandemic policies related to diagnostic testing.

Notably, the focus on non-lab testing and bolstered efforts around data sharing and surveillance included in the bill are also key priorities laid out in Shuren and Stenzel’s publications – indicating that the FDA is currently well positioned to engage with other federal policymakers about potential future pandemic preparedness policies.

Section 105: Developing antimicrobial innovations

Summary: Develop a subscription model that would allow HHS to pay companies for antibiotic products in a way that “is delinked from the sales or use of those newly-developed antibiotics.”

How it would work: HHS would be tasked with convening a “Committee on Critical Need Antimicrobials,” which would develop a list of priority infections for which antibiotic/antimicrobial drugs are most needed. HHS, in consultation with the Committee, would develop a series of criteria that outline the value of the products that is not tied to individual volume of sales, but instead relies on factors such as clinical benefit in the face of multi-drug-resistant infections, route of administration, and product novelty. Further, the Department would be directed to issue new regulations allowing for subscription contracts that would pay companies for the “value” of their antibiotics/antimicrobial, rather than sales. Notably, this proposal incorporates the policies introduced in the Senate by Senators Bennet (D-CO) and Young (R-IN) and in the House by Reps. (D-PA) and Ferguson (R-GA) as the PASTEUR Act.

Analysis: Federal policymakers have faced challenges creating appropriate incentives that can support the development of AMR products. In general, although these products are incredibly important to public health, the market for antibacterial products is challenging for developers, as the best-practice for use of an antibiotic/antimicrobic product is dependent on using these products as sparingly as possible. As then-FDA commissioner Scott Gottlieb remarked in 2018, “research and development to discover a new antibiotic is scientifically and economically challenging.”

Currently, one of the main incentives for the development of antimicrobial products is the FDA’s Qualified Infections Disease Product (QIDP) designation, which allows for a five-year exclusivity for QIDPs. The availability of that designation has not fundamentally changed the landscape of antibiotic/antimicrobial product development. Notably, while the qualifying pathogens under the QIDP are listed in statute, under the proposals in Cures 2.0 and PASTEUR an entirely new Committee would be convened to define which products and/or infection areas would need to be a priority for the program. Further, sponsors could “petition” to have their products considered for the subscription model, which may serve to broaden the scope of the incentive. AMR is likely to be a significant issue of the next few years, especially given the interaction with the global pandemic and increased legislative interest in combating antibiotic resistance and increasing stewardship efforts.

Title II: Patients and Caregivers

In addition to provisions that would seek to increase health literacy for patients and provide additional support for caregivers, this section includes policy proposals related to clinical research programs, including clinical trial diversity and mandating collection of patient-reported outcomes (PROs).

Section 203: Increasing diversity in clinical trials

Summary: Directs a variety of federal stakeholders, including FDA, the Government Accountability Office (GA), and HHS to update Congress on, and bolster activities around, diversity in clinical trials.

How it would work: FDA would be directed to submit an updated report to Congress on its efforts to increase representation in clinical trials, as originally required under the FDA Safety and Innovation Act (FDASIA), and to update its FDASIA-mandated action plan on inclusion of underrepresented demographic subgroups. To support future actions, the bill would also direct GAO to develop recommendations on how to decrease barriers to trial participation “by individuals in underrepresented populations,” HHS to develop a “public awareness campaign” about participating in trials and establish a task force to recommend improvements to ClinicalTrials.gov.

Analysis: Clinical trial representation for underrepresented groups, including racial minorities, lower-income individuals, those with long-term disabilities and those in non-urban areas has been a priority for public health and clinical stakeholders in recent years. Over the past year, the FDA has issued several guidance documents that are intended to help sponsors of certain products include historically excluded patients as participants, although advocacy organizations still say that there is more progress to be made. Notably, those guidance documents encourage, but do not require, sponsor to expand clinical trial eligibility. According to AgencyIQ’s analysis, only 20% of participants in the average study or studies used to support market access in 2020 identified as any race other than White – a decrease in racial diversity compared to recent years. Although some researchers have called on the FDA to allow the use of more non-clinical trial data to improve representation, real-world data (RWD) sets also face challenges in defining and adequately representing underserved populations. While the provision in Cures 2.0 would direct FDA to update a report and action plan mandated under FDASIA, the overall utility of that policy proposal may be limited.

Section 204: Patient experience data

Summary: Requires sponsors to collect “standardized” patient experience data during clinical trials, which the FDA would be tasked with reviewing as part of a market access application.

How it would work: For any drug product being studied in a clinical trial subject to an Investigational New Drug (IND) application, the sponsor would be required to “collect standardized patient experience data as part of the clinical trials” conducted under the IND. Any drug or biologic for which this data is collected would also need to be submitted in the marketing application to the FDA, with the agency directed to “consider patient experience data and related information” as part of the review process.

Analysis: “Patient experience” data, which can include Patient-Reported Outcomes (PROs) or Clinical Outcome Assessments (COAs) as a part of clinical research programs, are an emerging area of interest for regulators and industry. In general, these types of data are used to inform the benefit and risk profile of a product. For example, even if a therapeutic comes with known risks, patient perspectives on the meaningfulness of an endpoint or side effects can help factor into the agency’s decision, while a novel benefit or functional improvement that is captured through a PRO measure can be included in labeling for certain products. The agency’s activities on patient experience data so far have focused on encouraging the use of PROs, qualifying COAs, and holding Patient Focused Drug Development (PFDD) meetings to understand what endpoints, side effects or symptoms are most meaningful to patients. However, all of these activities currently remain voluntary. Notably, the bill does not require the FDA to consider patient experience data as a measure of safety or efficacy, but rather to accept and review these data as part of a full application. A key point of the provision would also be the requirement for sponsors to collect this information in a “standardized” format. Currently, there is no universal standard for data collected directly from patients (called Patient Generated Health Data) either during clinical care or clinical research. While the bill does not outline what, if any, specific data standard sponsors should consider using, there is an overarching trend throughout the health care agencies (including FDA, CMS and ONC) that non-traditional clinical data sources should be leveraging similar data elements, which can help build a foundation for validated RWD.

Title III: FDA

This section focuses on policy proposals related to FDA regulation of medical products, including digital health, clinical development programs and the use of RWE. In addition, the section emphasizes improvements to the FDA’s programs that expedite market access for certain drugs, including the Accelerated Approval process and Breakthrough Therapy program.

Section 301: Report on collaboration and alignment in regulating Digital Health Technologies

Regulatory Background: Digital health technologies are not a single regulated product type. Rather, digital health tools can be regulated as a medical device, have functions that are statutorily exempted from the definition of a medical device (e.g., transmitting and displaying certain data) or be used in the clinical development of a new drug – or potentially all three. As such, none of the FDA’s Centers (Center for Drug Evaluation and Research, Center for Biologics Evaluation and Research or Center for Devices and Radiological Health) have full regulatory authority over all digital health tools.

How it would work: The bill would direct the FDA to report to Congress on its efforts to align regulatory strategies and policies for digital health across the different agency Centers. FDA would be required to provide a report to Congress on “the efforts to ensure collaboration and alignment” within the agency on digital health technologies. The report would include information on how digital endpoints can be used for development (including validation and qualification of digital endpoints) and how the agency is collaborating with foreign regulators to align global digital health policies. Interestingly, the bill would also define “digital health technologies” as “technologies in health care or society that help deliver or provide access to health care products and services such as hardware (for example, wearable sensors, virtual reality headsets, and digitally-enabled drug delivery devices), advanced analytics (for example, artificial intelligence, machine learning, and sophisticated computation), cloud services (for example, storage, computing, and data processing), and software (for example, mobile medical applications, and software as a medical device).

Analysis: Notably, it was the original iteration of the 21st Century Cures Act that defined when a digital health technology is (and is not) eligible to be regulated as a medical device by the FDA. However, in the time since that law was passed, the digital health care landscape has evolved. Although the FDA only regulates a subset of the types of products under the proposed “digital health technology” definition (e.g., virtual reality headsets for which a developer wants to make a medical claim, software as a medical device are medical devices, a FitBit is not), the agency does also have expectations around, and authority over, the way that clinical research programs are run – including acceptable remote monitoring technologies (e.g., a FitBit) and endpoints.

The provision on digital health is largely a carryover from the first Cures 2.0 proposal, which was issued in late 2019. However, the FDA has taken action to align its own internal processes since then, launching a Digital Health Center of Excellence (DHCoE) in late 2020. That CoE is intended to be the hub for all digital health policy – including both regulation of digital tools as a medical device and informing on policies related to digital tools used in decentralized trials and validated digital endpoints – throughout the agency.

If enacted, AgencyIQ would expect that the FDA’s report to Congress under this provision would outline the internal role of the DHCoE. The agency’s activities under the CoE are already underway – according to recent remarks from DHCoE Director Bakul Patel. However, the agency’s activities likely still need to catch up to the industry’s investment in the area of digitally enabled research. With the Covid-19 pandemic, clinical research programs were driven online, necessitating the transition to using remote monitoring technologies in the field, progress that industry stakeholders, researchers and agency officials have expressed support for maintaining post-pandemic.

These market needs have led to novel partnerships between industry, regulators and researchers. Notably, CDRH recently announced its participation in a new collaborative community, convened by the Digital Medicine Society (DiME), that will help the FDA research and identify best practices for digital tools in clinical research. Private partnerships are also increasing in this field. For example, remote monitoring firm HumanFirst (a founding member of the new collaborative community) announced a research partnership with the Duke University School of Medicine (DCRI) to build a Digital Measures Evaluation Center to advance the assessment of “sensors and other digital measures used in clinical research.”

Section 302: Grants for novel trial designs and other innovations in drug development

Regulatory Background: The FDA has specific expectations around the methodology used in clinical trials. When clinical trials include adaptive designs, Bayesian statistical methods or what the FDA calls “other features requiring simulations to determine statistical properties,” the agency refers to them as “Complex Innovative Clinical Trial Designs” or CID. According to the FDA, adaptive designs for clinical trials allow “for prospectively planned modifications to one or aspects of the design based on accumulating data from subjects in the trial.” While these trial designs may help increase flexibility and nimbleness for sponsors of research programs for difficult-to-treat or rare diseases, they are also complex to launch and administer appropriately.

How it would work: The bill would appropriate $25 million per year between 2022 and 2024 for the FDA to award grants for researchers using “complex adaptive and other novel trial designs,” as well as those collecting “Patient experience data” in drug development programs (see the section on patient experience data above). FDA would be directed to prioritize research programs that utilize digital health technologies, capture patient experience data (both as discussed above) and leverage RWD.

Analysis: There is already significant interest amongst the life sciences industry to develop new ways of conducting clinical research. With the FDA currently negotiating with industry about the new iteration of the Prescription Drug User Fee Act (PDUFA), policies and resources to support CID are a top issue for both the agency and industry representatives. However, industry has pushed back on increased user fees to support enhancements to the FDA’s programs, citing financial concerns. Increased grant funding for industry to develop these programs is likely to be a benefit for development programs.

Industry is already also investing in digital platforms for clinical research – an effect that was greatly expedited by the Covid-19 pandemic forcing clinical research programs online. However, additional financial assistance to develop these programs will likely be viewed as a positive by the industry, especially if firms are required to collect “patient experience” data if the bill becomes law.

Section 303: FDA Cell and Gene Therapy

Regulatory Background: In recent years the FDA has seen a substantial increase in the amount of industry interest in developing cell and gene therapies (CGTs). From a regulatory perspective, that has raised concerns about whether the FDA has the resources it needs to review a coming wave of CGT product. For example, it has said it needs to hire additional staff, develop additional regulatory frameworks to accommodate emerging science and invest in new regulatory science methods to assist in the review process.

How it would work: The legislation would require the FDA to submit a report to Congress detailing the “foreseeable challenges to the FDA with respect to cell and gene therapies during the next ten years,” how the agency plans to address those challenges, and the resources and authority the FDA needs from Congress.

Analysis: While the ten-year lookahead report may be helpful for the FDA, the requested information is generally already available. For example, the FDA this year asked Congress for $900,000 to assist its data modernization efforts related to cell and gene therapies and the receipt of “novel data sources” with “large and varied data sets.” In an interview with Politico in 2020, Peter Marks, the Director of the FDA’s Center for Biologics Evaluation and Research, said the agency has seen a surge in applications for cell and gene therapies. “We’re going to have to grow significantly in the next few years to keep pace,” Marks said. And recent negotiations between the FDA and industry have focused on the need to provide additional resources to the FDA to hire review staff to support CGT-related applications. Although a ten-year roadmap may be helpful to set legislators’ expectations about what the FDA will need to review these applications, it’s worth noting that the rapid pace of scientific development may make it difficult to predict the number or timing of applications – or the specific staff that the FDA will need to employ.

Section 304: Increasing use of Real-World Evidence

Regulatory Background: Real world evidence (RWE) is clinical evidence on a product’s safety or efficacy that is generated from analysis of data that is captured outside of a clinical trial (called real-world data, or RWD). This includes data from electronic health records (EHRs), billing and claims data, data from clinical registries and new and emerging data sources like wearables and biosensors. Currently, the FDA’s approach to the use of RWE in regulatory decision making is limited for drug products. In general, the agency is concerned about the relevancy and validity of RWD sources (i.e., does the data relate to the question being asked, and was the data captured in a validated and consistent way), as well as RWE methodologies, which may be biased.

How it would work: HHS (likely through the FDA) would be tasked with issuing new guidance about the use of RWE in post-market (i.e., post-approval or licensing) evaluations of drugs that went through an expedited review process, specifically including products with a Breakthrough Therapy designation, a Fast Track review or “product considered for accelerated approval.” The guidance would include recommendations on ensuring adequate representation among the population, acceptable endpoints and outcome measures for RWD sources, data quality and transparency expectations and how the studies should be designed. In addition, HHS would be directed to evaluate the FDA’s RWE framework and “identify consistent, clear approaches” for use in the whole Department to harmonize RWD, not only for market access decisions but also “in regulating, purchasing, and supporting the purchase of health care products and services.”

Finally, the bill would establish an RWE Task Force, which would include leadership from HHS’ core science and health care regulatory agencies and other stakeholders (CMS, FDA, NIH and “additional Federal officials” and “private sector representatives” selected by HHS), would make recommendations on how to engage patients in RWD development, and “participate in postapproval clinical trials for the collection of real world evidence.”

Analysis: The FDA’s programs outlined in the bill are intended to expedite market access for products that fill a significant unmet need or represent a significant clinical benefit over available therapies. However, the expedited development and review processes can leave some outstanding questions about the long-term safety and efficacy of these products, leading to increased post-market evidence generation expectations for sponsors.

Recently, federal officials have been raising some concerns about the conduct of these studies to confirm benefit, especially for products approved under the Accelerated Approval pathway. Under the proposal in Cures 2.0, sponsors would be able to leverage RWD sources, such as clinical registries, to help support post-market commitments. While the use of RWD can reduce the burden on a sponsor to independently stand up a research program, the FDA is currently hesitant to allow RWE to be used for these study commitments for drug products (although the process is well-established for medical devices, and the agency encourages device sponsors to use RWD sources for post-market commitments whenever possible).

This provision as outlined could reduce duplicative research efforts for some of these products. For example, a product that has been granted Accelerated Approval and is subject to follow-up study requirements by FDA may also be subject to a Coverage with Evidence Development (CED) policy from CMS, and having HHS harmonize how RWE will be considered at all levels within the Department could streamline these processes. Further, having HHS establish Department-wide standards for RWE not only in market access decisions but also payment and purchasing could clarify to sponsors how federal payers will consider products that are granted market access based on RWE, potentially smoothing the process to coverage and reimbursement and help researchers feel more confident in investing in RWE-based research programs.

Finally, the utility of the current mandate for the RWE Task Force seems limited at this time. Although there are several outstanding questions related to RWD that could benefit from a cross-agency task force, such as unified data standards and how to address data gaps (e.g., clinical laboratory data, socioeconomic status data), the bill currently tasks the Task Force with developing recommendations to engage patients in RWD development. However, according to a recent FDA meeting on PGHD, patients are already overwhelmingly willing to engage in RWD development when they can, including those who are underrepresented in traditional clinical trials.

Section 305: Improving FDA-CMS communication regarding transformative new therapies

Regulatory Background: While the FDA is tasked with market access decisions for life sciences products, the Centers for Medicare and Medicaid Services (CMS) determines coverage policies for the federal health care programs. Notably, both of these regulatory processes require review from the relevant agency, but the agency mandates vary: the FDA reviews a product for safety and efficacy, while CMS determines Medicare coverage for a product based on whether it is “reasonable and necessary” for the beneficiary population. Although a product may be granted expedited review through the FDA, market access and launch strategies are often time consuming and burdensome for developers.

How it would work: When a drug product is designated as a Breakthrough Therapy, granted a Fast Track Review or determined to be eligible for Accelerated Approval, FDA and CMS leadership would be required to “maintain communication with each other” about the “approval and coverage decisions” for that product, and share information that would be needed to inform such activities.

Analysis: Over the past several years, initiatives that seek to improve coordination between the FDA’s review (and potential approval) of a product and CMS’ decisions relating to coverage have been a key priority for both industry and patient advocates. Supporters of policies to streamline these regulatory activities highlight redundancies in both agencies’ review processes, as well as delays in coverage and reimbursement that can impact beneficiary access to novel products. However, the processes in both of these agencies are fairly burdensome and time consuming, and FDA and CMS have different mandates and roles when it comes to the marketing of regulated products.

In the device space, the FDA offers a Payor Communication Task Force to “facilitate communication between device manufacturers and payers,” as well as a “Parallel Review” process under which both FDA and CMS review a device’s submitted data simultaneously. However, these initiatives have had limited utilization, especially as CMS and FDA officials look for different metrics of a product’s benefits and risks and often have difficulty liaising within the federal government. Notably, the bill’s proposal does not require CMS to make a decision about coverage for any of these products within any specific time frame, so the operational effectiveness of such a law would likely be limited.

Section 306: Establishment of additional inter-center institutes at the FDA

Regulatory Background: The FDA has a small number of “centers of excellence” which serve as coordinating, policy-focused entities. The most famous of these centers is its Oncology Center of Excellence. It also has a Compounding Quality Center of Excellence that was established in 2020 and a Digital Health Center of Excellence (mentioned above). In recent years, there has also been discussion about whether to create additional centers of excellence. For example, some groups have called for a Rare Disease Center of Excellence, a Neurological Diseases Center of Excellence, and a Center of Excellence in Biostatistics.

How it would work: The legislation would establish two additional centers of excellence at the FDA. The first center would be charged with focusing on “a group of diseases” with some specific criteria. For example, eligible diseases would be those that negatively affect one major body system, represent a major disease burden, affect more than 50 million Americans each year, are a leading cause of mortality and a major contributor to health costs, and for which the coronavirus exacerbates symptoms. This likely would include diseases of the heart and lungs, as well as obesity. The second center would focus on rare diseases, defined as diseases affecting fewer than 200,000 persons in the U.S. In other words: These centers would not represent Centers of Disease Excellence, but rather Centers of Diseases Excellence.

Analysis: Based on recent comments by Rick Pazdur, the Director of the FDA’s Oncology Center of Excellence, these centers of excellence may not be welcomed by the agency. According to Pazdur, the FDA doesn’t need more bureaucracy for its own sake. Rather, a center of excellence first needs a strong scientific framework to understand how things may best be regulated. Then, he said, it needs to have a base of talented people. Only after the science and talent are in place would the FDA need additional and appropriate structure, such as a center of excellence. Without the first two elements in place, Pazdur said, the structure won’t do anything to help accelerate regulation and development – and might even serve as a barrier to efficient development.

In the case of these two centers of excellence, the lack of focus of each centers – essentially very common diseases and very uncommon diseases – may add bureaucracy, but not necessarily clarity. We’ll also note that this section also suffers from a lack of textual clarity, especially as it relates to the Rare Disease Center of Excellence proposal. For example, it’s not clear if one of the criteria is that the center can only focus on diseases affecting more than 50% children by population, or if the paragraph refers to the collective burden of rare diseases.

Section 307: Investigational New Drug Application (IND) not needed to initiate accelerated approval

Regulatory Background: An IND is used to initiate clinical studies involving an investigational drug product. In essence, it is a request to be exempted from federal law prohibiting the interstate distribution of an unapproved drug. INDs contain extensive information about the drug product being studies, how the trial will be run, how subjects will be protected, and the endpoints that will be studied in the trial. Once an IND is allowed to proceed, the sponsor of the trial may begin enrolling subjects.

How it would work: The draft legislation would alter how INDs are considered for the purposes of investigational drugs seeking Breakthrough Therapy Designation (BTD). The BTD is a review acceleration mechanism intended to facilitate the timely development and review of products deemed to have a high potential to benefit patients in a meaningful way. Benefits include a rolling review, guidance on efficient drug development, and FDA coordination. The designation conveys all the benefits of Fast Track Designation.

A medical product is eligible for BTD if it is intended to treat a serious condition, with evidence indicating the product may result in substantial improvement to a clinically significant endpoint relative to already-approved therapies. Under current law, the sponsor of an investigational product may apply for breakthrough designation “concurrently with, or at any time after, the submission of an [IND].”

However, under the draft legislation, companies would be able to request breakthrough designation “at any point before or after submission of an application for approval of the drug.” Sponsors would also be able to request designation as a Regenerative Medicine Advanced Therapy (RMAT) in the same way. RMATs are cell- or tissue-based products that are intended to treat, modify, reverse or cure a serious or life-threatening disease or condition. The RMAT designation program is highly similar to BTD, though the qualifications for the designation are different and the program is less commonly used.

Analysis: The legislation seems likely to simplify what can now be a confusing process for some sponsors of investigational products (i.e., when do I apply for breakthrough therapy/RMAT designation?). At present, the FDA recommends that a BTD request “should be received by FDA no later than the end-of-phase-2 meetings if any of the features of the designation are to be obtained.” That’s because “the primary intent of Breakthrough Therapy designation is to develop evidence needed to support approval as efficiently as possible,” which would limit the impact of the designation if it was obtained after the submission of an application for approval or licensure.

While sponsors would now be permitted to apply for breakthrough designation at “any point,” in practice the legislation is likely to have little effect on the BTD program. That’s because the FDA requires preliminary evidence to support the finding that the product “may demonstrate substantial improvement over available therapy on a clinically significant endpoint.” As such, the submission can’t be filed too early in the development process. Conversely, if the request is filed too late, the company may not actually benefit much from the designation.

Still, for companies that are confident in their early-stage evidence, the legislation makes clear that an IND application is “not needed” to apply for breakthrough designation. It’s just not clear if such submissions will be sufficient to allow the FDA to make such an early-stage determination in most cases. However, an early-stage designation for a company could be especially useful since the legislation requires (in Section 305) that the FDA and CMS “maintain communication with each other regarding approval and coverage decisions” for designated products and use that information to “inform and coordinate such decisions.”

Section 308: Guidance Regarding Development and Submission of Chemistry, Manufacturing, and Controls Information for Expedited Approval

Regulatory Background: The FDA maintains lots of programs intended to expedite the approval of medicines intended to treat serious or life-threatening conditions. Many of those programs work by either streamlining the review process, shortening the amount of time regulators have to review an application for approval, or front-loading certain work. However, much of the focus of existing programs is on clinical data – that is, the safety and efficacy of medications.

In practice, one of the biggest barriers to the expedited approval of new treatments can be the submission of data related to the manufacture of products. Such data are sometimes referred to as Chemistry, Manufacturing and Controls (CMC) information, and refer to the drug, how it is made and how its quality is assured.

How it would work: The bill legislation calls for FDA to release a “draft revised guidance to provide clarity regarding the development and submission of chemistry, manufacturing and controls information” related to the submission of breakthrough therapies, fast track products, accelerated approval and regenerative medicine advanced therapies. The FDA would have 6 months to release the draft guidance, and an additional 90 days after the close of the comment period to finalize the guidance.

The guidance document would need to address “how the FDA will determine how, and by when, CMC information is required to be submitted throughout development and during the pre- and post-approval phases.” The guidance would need to take into account the risks of requiring such information compared to the benefits of making the drug available to patients more quickly. It would also need to address how regulators “will provide ongoing advice and opportunities for sponsors to interact with the FDA” on CMC issues during the lifecycle of the product.

Analysis: While this section is straightforward and seemingly simple, the guidance it calls for could be exceptionally helpful in avoiding instances in which a company’s breakthrough product has been shown to be safe and effective, but is unable to be approved because the FDA hasn’t been shown data to demonstrate that the drug can be reliably made.

The legislative language’s insistence that the FDA balance the risks of making the product available with the risk of delayed access is especially important. While CMC-related issues can be serious (e.g., issues related to contamination or substandard quality), some issues may be less serious and best resolved in a post-market setting.

Regulatory Background: Accelerated approval is a regulatory pathway through which the FDA may approve drugs for serious or life-threatening illnesses based on intermediate or surrogate endpoints that are reasonably likely to predict the clinical benefit of the drug for a specific group of patients. Because the data used to support approval are preliminary, companies that obtain accelerated approval for a product must then conduct confirmatory testing. If that testing fails to confirm the benefit of the drug, the FDA may initiate proceedings to withdraw the drug from the market.

How it would work: At present, the law states that sponsors should “conduct appropriate post-approval studies to verify and describe the predicted effect on irreversible morbidity or mortality or other clinical benefit.” To some, that language – “studies” – is overly narrow.

To address that, the legislation calls for the Federal Food, Drug and Cosmetic Act to be amended to allow for the submission of “clinical evidence, patient registries, or other sources of real-world evidence” to satisfy post-marketing commitments for products granted accelerated approval.

Analysis: This change should be uncontroversial since it closely mirrors another requirement now in effect for regenerative medicines (“the submission of clinical evidence, clinical studies, patient registries, or other sources of real world evidence, such as electronic health records”). It’s also quite similar to requirements for some medical devices, which more commonly rely on patient registries and real-world evidence as a condition of approval [ Read about recent FDA guidance on the use of RWE for postmarket surveillance studies.]

Title IV: CMS

This section of the draft legislation focuses on policies related to the coverage of medical technologies and services by the Medicare and Medicaid programs. While it includes proposals related to service coverage, it also includes policies related to market access and coverage for drugs and devices.

Section 404: Coverage and payment for Breakthrough Devices under the Medicare Program

Summary: Directs CMS to provide transitional coverage under the Medicare program for medical devices that have been granted a Breakthrough Device Designation (BDD) by the FDA.

How it would work: The FDA grants Breakthrough Device Designations (BDDs) for medical devices intended to treat “life-threatening or irreversibly debilitating” conditions that address unmet needs, are in the best interest of patients, or represent “breakthrough technology.” These are typically granted early in the device’s regulatory process. However, while a sponsor of a Breakthrough device will receive additional support from FDA during the review process, the BDD does not grant the device expedited coverage decisions from CMS.
Under the proposal, BDDs that have received market access by the FDA would be “deemed to be reasonable and necessary” for Medicare coverage. Further, they would automatically qualify for additional payment under the Medicare prospective payment systems, including the New Technology Add-On Payment (NTAP) for the inpatient payment system (excluding the cost criterion for eligibility) and pass-through payment for the outpatient payment system. The “transitional coverage” would begin on the day of a market access decision by the FDA and last for up to four years. HHS would be further required to provide coding (either a unique temporary code or permanent code or codes) for the product within three months of market access and develop a full coverage proposal within two years of market access.

Analysis: The provision in the bill includes policies previously introduced in the House as the Ensuring Patient Access to Critical Breakthrough Products Act, which has been sponsored and introduced by Rep. Suzel DelBene (D-WA) since at least 2016. [ Read AgencyIQ’s analysis of the 2020 version of that bill here.]
The provisions in this bill are similar to the previous administrations Medicare Coverage of Innovative Technologies (MCIT) pathway, which was finalized in early January 2021 but has been delayed by the current administration. Although the section-by-section of the Cures 2.0 Act states that the provision would be intended to “codify the current Medicare Coverage of Innovative Technologies (MCIT) pathway at CMS,” the legislative proposal actually differs from that policy. First, the bill would allow “flexibility” for CMS to cover medical devices for which no benefit category under the Medicare program currently exists, which was a key limitation of the MCIT pathway. Second, the final MCIT rule allowed for “transitional coverage” to begin not on the day of market access, but any time within two years of the FDA’s decision. [Read AgencyIQ’s analysis of the MCIT rule here]

Also notably, at least part of this bill is already current policy. Under the 2021 Medicare Inpatient Prospective Payment System (IPPS), medical devices with a BDD have a streamlined pathway to receive an NTAP, which is an additional payment for novel technologies provided in the inpatient setting. However, those devices still need to go through the process of applying for an NTAP, and must still meet the cost criterion (i.e., the newness and clinical improvement criterion on which NTAP is traditionally considered are considered met if a device has a BDD).

However, the future of the inclusion of this provision is unclear. While the medical device industry has strongly supported both the Ensuring Patient Access to Critical Breakthrough Products Act and the MCIT, the bill has had limited success in previous sessions of Congress and other federal stakeholders have raised concerns about the policy. For example, the Medicare Payment Advisory Commission (MedPAC) penned a letter to CMS about the MCIT proposal in 2020, arguing that the MCIT pathway proposal would effectively delegate authority to determine Medicare program coverage to the FDA, which it states is inappropriate given the specific considerations for Medicare beneficiaries (i.e., individuals 65+) and the differences in the statutory mandates for Medicare coverage and BDDs.

The focus on a need to improve processes and expedite coverage to new products is a focus throughout the bill, which also includes two provisions (not summarized here) directing both GAO and HHS to submit reports to Congress about Medicare program coverage of “innovative technologies.” Specifically, GAO would be tasked with making recommendations about potential improvements to Medicare coverage for new products that could support public health or reduce program expenditures. Conversely, HHS’ report would specifically focus on “payment and coverage [for] digital alternatives to treatments and therapies, including wearables and digital applications and platforms,” for which there is notably not a good pathway for reimbursement under the Medicare program. It would also direct HHS to develop payment policies for novel diagnostic products – including genetic testing for rare diseases and pathways to coverage for “precision medicine consultation.”

Title V: Research

Section 501: Advanced Research Projects Agency for Health

Summary: The bill would establish a new agency, the Advanced Research Project for Health (ARPA-H).

How it could work: The ARPA-H would “complement NIH’s existing research portfolio and mission and the private sector’s research initiatives.” However, it is currently unclear if ARPA-H would live within the NIH or be a standalone agency.

Analysis: The text in the discussion draft is still a placeholder, so information is limited about how it would engage with other agencies or operational activities. However, it appears that the agency would be tasked with novel scientific research to “tackle bold challenges” and “create new capabilities” while “support[ing] high-risk exploration that could establish entirely new paradigms.” Such an agency could support the work of the NIH, especially if appropriated sufficient funding by Congress.


To contact the author of this item, please email (Laura DiAngelo.)
To contact the editor of this item, please email (Alexander Gaffney)

Key Documents and Dates