Leveraging Real World Data and Real World Evidence: How the FDA and CMS Have Approached New Data Sources - McDermott+Consulting

Leveraging Real World Data and Real World Evidence: How the FDA and CMS Have Approached New Data Sources

Innovations in health care have resulted in new data sources beyond clinical trials data, including data gathered from electronic health records, insurance claims, registries, and connected devices, which can help inform and provide evidence about drugs, devices, and other products. While the Food and Drug Administration (FDA) has started to consider the importance of real world data (RWD) and real world evidence (RWE), coverage and payment policies have used this information with varying degrees of success.[1] Broader recognition and incorporation of this information presents an opportunity to bring robust data and evidence into areas such as reimbursement and disparities research.

What is RWD/RWE?

Real world data are information routinely collected outside of traditional clinical trials. Examples include information from electronic health records, registries, medical claims, pharmacy data and patient reported outcomes.

The Food, Drug, & Cosmetics Act (FD&C) defines RWE as “data regarding the usage, or the potential benefits or risks, of a drug derived from sources other than traditional clinical trials”[2] i.e., the clinical evidence regarding the usage, benefits and risk, of a medical product derived from the analysis of RWD.[3]

Value of RWE in Context

Part of the value of these robust sources is that they allow the evaluation of all applications of products across the entire population of potential users. RWE can provide a comprehensive understanding of how a new therapeutic option will work in the “real world” rather than in the controlled environment of a trial and can include individuals with comorbidities, patient adherence challenges, and other factors not included in traditional study designs. This achieves greater generalizability, rather than across a smaller sample participating in clinical trials.

Real world evidence is especially important in the context of Patient Reported Outcomes (PROs). As defined by the FDA a patient reported outcome is “any report of the status of a patient’s health condition that comes directly from the patient, without interpretation of the patient’s response by a clinician or anyone else”.[4] Traditional data allows measurement of physical, biochemical and other data; however, it cannot provide us with information on certain quality of life benefits for the patients. Often, these metrics convey valuable information but not readily incorporated into regulatory analysis. PROs are increasingly included in clinical trials to evaluate and assess medical treatments/interventions. Between 2007 and 2013, 27% of clinical trials included PROs.[5]

RWE can also play a role in providing regulators, researchers and health care providers with information on treatment effects among underrepresented populations. Clinical trial study populations frequently are not fully representative of relevant patient populations, especially minorities and lower-income individuals. Deriving information from real-world settings may help address health equity gaps and other relevant information that could better address health disparities.[6]

Lastly, gathering and evaluating RWD and RWE can be less time-consuming and less costly when compared to traditional clinical studies.

FDA Recognition of the Need to Leverage RWE

The 21st Century Cures Act was signed into law on December 13, 2016 to accelerate medical product development and bring innovations quickly and efficiently to patients. Among the law’s provisions, section 505F of the FD&C Act tasks the FDA with creating a framework for evaluating the potential use of RWE to support approval of a new indication for an already-approved drug or satisfy drug post-approval study requirements.

In December 2018, the FDA released its Framework for FDA’s RWE Program, which focuses on the use of RWE to support regulatory decisions about effectiveness. The FDA has also published guidance issued August 31, 2017 on the usage of Real World Evidence to Support Regulatory Decision-Making for Medical Devices.[7] Specifically, the FDA stated that RWD “can potentially be used by sponsors to demonstrate compliance with regulatory requirements and to aid FDA in our regulatory decision-making.” They noted, “by recognizing the value of RWE as an important contributing factor for understanding and regulating medical devices, we hope to encourage the medical community to learn more from routine clinical care than we do today.”

Outlook for RWE for Reimbursement

While the FDA is beginning to work towards greater incorporation for RWD and RWE, the same focus appears to be less prevalent in government coverage and reimbursement decisions. The Centers for Medicare & Medicaid Services (CMS) has incorporated some use of RWE to design value-based models for Medicare and state Medicaid programs; however, often evaluation and recognition of the benefits of these programs continue to focus on traditional quality and cost measures.

In addition, CMS has acknowledged RWE as a factor in understanding if a product is a “substantial clinical improvement” over existing services and supplies for purposes of securing temporary Medicare add-on payments, specifically for the New Technology Add-on Payment (NTAP) and Transitional Add-on Payment Adjustment for New and Innovative Equipment and Supplies (TPNIES). Yet, CMS noted and emphasized clinical trial evidence in their qualification of substantial clinical improvement (SCI), demonstrating practical limitations.

Without a more formalized process for CMS to consider the value of RWD and RWE, reliance on traditional clinical data may fail to consider key patient outcomes and miss data on certain patient populations. Importantly, the reliance on traditional trial data places significant cost and time-constraints on developers who only have a short timeframe to support temporary add-on payments, and may discourage innovation.


[1] Gerrard P, et al. TPNIES – Leveraging Lessons Learned from NTAP. McDermott+ Insights. April 20, 2021. https://www.mcdermottplus.com/insights/tpnies-leveraging-lessons-learned-from-ntap/

[2] Pub. L. 114–255 §3022, Dec. 13, 2016, 130 Stat. 1096

[3] U.S. Food and Drug Administration. Framework for FDA’s Real-World Evidence Program. December 2018. https://www.fda.gov/media/120060/download.

[4] U.S. Food and Drug Administration, Guidance for Industry, Patient-Reported Outcome Measures: Use in Medical Product Development to Support Labeling Claims, Available at http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UC M193282.pdf

[5] Vodicka E, Kim K, Devine E, Gnanasakthy A, Scoggins J, Patrick D. Inclusion of patient-reported outcome measures in registered clinical trials: evidence from ClinicalTrials.gov (2007–2013). Contemp Clin Trials. 2015;43:1–9.

[6] Fullam F, et al. Listening to the Voice of all Patients to Help Heal Health Disparities in a Post-COVID-19 World. Health Affairs. May 5, 2021. https://www.healthaffairs.org/do/10.1377/hblog20210430.456198/full/

[7] U.S. Food and Drug Administration. Use of Real-World Evidence to Support Regulatory Decision-Making for Medical Devices: Guidance for Industry and Food and Drug Administration Staff. August 31, 2017. https://www.fda.gov/media/99447/download.


*Baxter International Inc. provided financial support for portions of this newsletter.


For more information, contact Paul GerrardKristen O’Brien, Jennifer Ohn or Paul Radensky.