FDA-CMS Parallel Review: A Failed Attempt at Spurring Innovation

Abstract

In 2010 the Food and Drug Administration and the Centers for Medicare & Medicaid Services (CMS) founded a pilot program for medical devices: simultaneous review of FDA premarket approval submissions and CMS national coverage determinations. By reducing the amount of time between obtaining marketing approval and securing Medicare coverage, the parallel-review program is supposed to facilitate the development of innovative medical devices and to shorten the time it takes to bring these devices to patients. After five years, however, the program’s impact remains limited: so far, only one device has been approved through this process. Why are manufacturers not more interested in this opportunity? While parallel review might shorten time to national coverage determination, it is likely to delay marketing of the device. Moreover, while meant to promote innovation, parallel review does not address key obstacles manufacturers currently encounter in bringing their products to market.

Keywords: pilot program for parallel review of medical products, Food and Drug Administration, Centers for Medicare and Medicaid Services, medical devices, premarket approval, national coverage determinations, local coverage determinations, innovation

JEL Classification: H75, I18