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Knowing When and How to Use Medical Products
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Original article posted on The Jama Network 

Before a medical product can be widely used in the United States, it generally must first be approved or cleared for marketing by the US Food and Drug Administration (FDA). Then, payers such as the Centers for Medicare & Medicaid Services (CMS) must decide whether the product merits coverage and payment. Because the statutes governing these agencies evolved to meet the exigencies of particular moments in the history of medical product development, the degree of convergence in standards and in the underlying evidence needed to support regulatory and payment decisions is not always immediately obvious. The resulting fragmentation—perceived or real—has led to questions about whether FDA approval or clearance for marketing will necessarily result in approval for coverage and payment.

Despite these challenges, changes in the organization of health care and in the larger information ecosystem should allow the FDA and CMS to move increasingly toward use of shared sources of evidence while still applying the most appropriate criteria to their decision making. Such a move should help reduce current gaps in evidence that create uncertainty surrounding the approval or clearance of new therapies and their subsequent use in practice. It should also enable greater efficiency in medical product development and provide the higher-quality evidence needed in the emerging era of precision medicine.

Although different standards are applied for product approval or clearance for marketing (in the case of the FDA) and coverage and payment (in the case of CMS), both agencies base their determinations on scientific evidence. The FDA bases drug approval for marketing on “substantial evidence” derived from at least 1 well-conducted clinical trial,1 whereas CMS uses “reasonable and necessary” as the standard for coverage.2 In the increasing number of situations in which “coverage with evidence development” is used by CMS, coverage decisions are based on “… formal review of the medical literature … only in the context of an approved clinical study or when additional clinical data are collected to assess the appropriateness of an item or service for use with a particular beneficiary.”3

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