society's health care needs. This is a major concern for FDA given that many changes are taking place in health care, such as a move toward managed care systems, a shift to more restrictive drug formularies, a move to outcomes-based research, increased availability of information, a restructuring of the pharmaceutical industry, and the rise of drug-resistant pathogens.

In an effort to address the challenges posed by the changing health care environment, FDA has implemented several initiatives. For instance, FDA is exploring how it can provide information and expertise useful for the evaluation of drug formularies and drug benefits programs. It is collaborating with other agencies, such as the Health Care Financing Administration (HCFA) and the Agency for Health Care Policy and Research, to sponsor a workshop intended to assist managed care organizations and HCFA with evaluating drug benefit designs. It is also implementing sections of the FDA Modernization Act of 1997 that deal both with the efficient and swift dissemination of information on new uses (offlabel information) of drugs and devices (Section 401) and with the dissemination of economic information in drug promotion (Section 114).

In addition, FDA recently published draft guidance on medical product promotion in the managed care environment. The agency acted because of evidence that suggested that medical product manufacturers could avoid regulatory oversight of promotional activities by allowing pharmacy benefit management companies and other health care organizations to disseminate volatile information on their behalf. Although not a legally binding document, the guidance represents FDA's expectations with respect to existing laws. Another draft guidance recently published by FDA has focused on policies related to advertising directly to consumers, which has resulted in a sharp increase in advertising on television. It is hoped that continued revision of draft guidance and policies will continue to have positive effects on the changing health care environment.


Presented by Susan Horn, Ph.D.

Senior Scientist, Institute for Clinical Outcomes Research, Vice President of Research for International Severity Information Systems, and Professor of Medical Informatics, University of Utah School of Medicine

Although formulary management is an important component in health care practice, its role in cost control and its effect on quality of care have not been well understood. In an effort to analyze the relationship between managed care formularies and treatment outcomes, the Institute for Clinical Outcomes Research (ICOR) conducted a 12-month study that analyzed the consequences of the cost-containment practices of health maintenance organizations (HMOs) and resulting outcomes. Six HMOs participated in a program that studied almost

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