Medical Policies - Administrative

Inside the U.S. Food and Drug Administration (FDA)


Effective Date:07-15-2018



In general, any equipment, drug, device, and/or supply that has not received marketing approval (permission for commercial distribution) from the United States (U.S.) Food and Drug Administration (FDA) is considered experimental, investigational and/or unproven.

Any equipment, drug, device, and/or supply that has received marketing approval but the equipment, drug, device and/or supply is not being used for the purpose or manner for which it was initially rendered, is considered experimental, investigational and/or unproven.

Any equipment, drug, device, and/or supply that has not been manufactured according to established FDA standards, regulations and/or procedures, is considered experimental, investigational and/or unproven.

In some cases, the off-label use of equipment, drugs, devices, and/or supplies may be considered eligible for benefit coverage. Those instances, along with determination of coverage criteria, are addressed in separate Health Care Services Corporation (HCSC) Medical Policies. When a separate HCSC Medical Policy is not found for the off-label use of a drug, refer to RX503.001, Off-Label Use of FDA Approved Drugs.

Special Comment: FDA review and approval of devices only addresses safety of the device. The FDA does not address efficacy. Therefore, HCSC does not necessarily recognize benefit coverage for FDA approved devices unless well-designed controlled studies in the peer-reviewed medical literature demonstrate efficacy and improved health outcomes from use of the device.


What is the Food and Drug Administration (FDA)?

The FDA is a U.S. (Federal) government agency that regulates the following items:

Food (human and animal, other than meat and poultry);

Dietary Supplements (human and animal);

Drugs (human and animal);


Medical and/or Occupational Devices, Equipment, Supplies (human and animal);

Radiation Emitting Products (human and animal);

Biologics; and

Blood Products.

What does the FDA do?

The FDA is responsible for:

Protecting the public health by assuring that foods (except for meat from livestock, poultry and some egg products which are regulated by the U.S. Department of Agriculture) are safe, wholesome, sanitary and properly labeled; ensuring that human and veterinary drugs, and vaccines and other biological products and medical devices intended for human use are safe and effective;

Protecting the public from electronic product radiation;

Assuring cosmetics and dietary supplements are safe and properly labeled;

Regulating tobacco products; and

Advancing the public health by helping to speed product innovations.

The FDA's responsibilities extend to the 50 United States, the District of Columbia, Puerto Rico, Guam, the Virgin Islands, American Samoa, and other U.S. territories and possessions.

The mandate of the FDA is to regulate, by approving, labeling, and monitoring, the numerous medical products in an expeditious, yet thorough evaluation of the product’s safety and effectiveness in meeting the labeling claims. The process is handled by FDA review teams to recommend approval of a product. Following approval, safety teams determine whether the product is hurting an individual. Under current law, the FDA must approve all drugs and devices before they can be marketed. Although the process may be known as the FDA testing program, the FDA does very little of the testing. The developer of a new drug or device uses its own lab or hires another private company to conduct animal tests on the product for safety before proceeding to clinical trials. Generally, these tests are often conducted by a medical school department or consulting firm. When each phase of the testing is completed, the developer submits details of the testing process, evidence of adherence to FDA protocols, and the test results to the FDA.

The FDA requires clinical testing for most products, such as drugs, devices, biologics, and blood products. However, dietary products are not pre-approved for safety and efficacy. Only after the dietary supplement has been marketed, the FDA monitor for unsafe products. Certain foods, such as infant formulas or medical foods are regulated more strictly than other dietary supplements as they are consumed by highly vulnerable individuals.

Neither the FDA nor the federal government regulates the practice of medicine. The FDA’s role is to mandate that products should be labeled with their ingredients, be safe, and be effective. A licensed provider may choose to use an FDA approved product for other indications than those stated on the product label. Off-label use is not illegal. (Refer to Off-Label Use of FDA Approved Drugs policy for coverage criteria.) There is an obligation by providers to report any adverse events, including events resulting in hospitalization or death of a patient, especially those not previously described on the product label.

What is the FDA History?

The FDA grew from a single chemist, part of the U.S. Department of Agriculture in 1862, to the current agency’s multilevel and staffed field offices and laboratories.

1867 – The Division of Chemistry began investigating adulteration of agricultural commodities.

1883 – Began to review misbranding of food and drugs, rather than “anything goes” manufacturing and distribution.

1887 – Expanded the division’s research by a ten-part study on Foods and Food Adulterants, to prevent impure products from making it to the American public. Unfortunately, any regulations enacted from the reviews and research did not carry any penalties and quality checks to protect the American public from products placed on the market.

1901 – Changed to the Bureau of Chemistry.

1906 – Passage of the Federal Food and Drug Act to add regulatory functions to the scientific mission.

1927 – The Bureau of Chemistry reorganized into two separate entities: Regulatory functions located in the Food, Drug, and Insecticide Administration, and non-regulatory research in the Bureau of Chemistry and Soils.

1930 – The name of the Food, Drug, and Insecticide Administration was shortened to Food and Drug Administration (FDA) under the Agricultural Appropriations Act.

1938 – Congress enacted the Federal Food, Drug, and Cosmetic Act (FD&C Act) to ensure public safety and establish the FDA.

1940 – FDA moved from the Department of Agriculture to the new Federal Security Agency.

1951 – FDA classified drugs or products as available by either over-the-counter (OTC) distribution or by prescription only.

1953 – FDA transferred directly to the Department of Health, Education, and Welfare (HEW).

1968 – FDA shifted within HEW under the Public Health Service.

1976 – As a result of a legislative plan to review devices in 1970, the Medical Device Amendment was passed to provide the FDA with sufficient authority to protect the public health with respect to medical devices.

1980 – When education was removed from HEW, the FDA was under the Department of Health and Human Services, part of the Executive Office branch of the U.S. Government. FDA acquired formal regulatory authority over devices, equipment, and supplies.

1990 – The FDA passes laws banning “gifts of substantial value” from drug companies to physicians. However, minor gifts, such as meals, tickets, and travel, are not banned. In addition, The Safe Medical Device Act of 1990 was enacted.

1992 – Congress passes a new law creating a faster approval process to legalize new drugs. Approval times drop from 30 to 12 months. Sixty percent of new drugs come onto the market faster in the U.S. compared to other countries; whereas, before this law, the approval process was slower and more drugs were released in other countries first. The Medical Device Amendments of 1992 were revised and expanded the 1976 Act.

1997 – FDA loosens restrictions on consumer advertising. Drug companies are allowed to spend less time describing risks and side effects in commercials.

1998 – FDA announces the Pediatric Rule, a regulation that requires manufacturers of selected new and extant drug and biological products to conduct studies to assess their safety and efficacy in children.

1999 – was founded.

2002 – The Best Pharmaceuticals for Children Act was enacted to improve safety and efficacy of patented and off-patent medicines for children.

2002 – In the wake of September 11, 2001, the Public Health Security and Bioterrorism Preparedness and Response Act was designed to improve the country's ability to prevent and respond to public health emergencies, and provisions include a requirement that FDA issue regulations to enhance controls over imported and domestically produced commodities it regulates.

2004 – Project BioShield Act of 2004 authorizes FDA to expedite its review procedures to enable rapid distribution of treatments as countermeasures to chemical, biological, and nuclear agents that may be used in a terrorist attack against the U. S., among other provisions.

2005 – Formation of the Drug Safety Board, bringing together FDA staff and representatives from the National Institutes of Health and the Veterans Administration.

2006 – The FDA has entered into the global marketplace, the information revolution, and increased trade negotiations. The FDA evolved into the international arena in emerging public health issues and safety.

2010 – Affordable Care Act (ACA) was signed into U.S. Law. The impact to the FDA is requirement that manufacturers and authorized distributors must submit specific information concerning drug sample distribution. This includes 1) the identity and quantity of drug samples requested; 2) the identity and quantity of drug samples distributed; 3) the name, address, professional designation, and signature of any person who makes or signs for the request; and 4) any other category of information determined appropriate by the FDA Secretary.

2012 – The FDA was given the authority by the Food and Drug Administration Safety and Innovation Act (FDASIA) to collect user fees from industry over five years to fund reviews of innovator drugs, medical devices, generic drugs, and bio-similar biological products.

2013 – The Office of Medical Policy (OMP) under the FDA was created.

What is the basis of FDA authority?

Authority for the FDA comes from laws from the Legislative branch, and regulations, which are the interpretations of laws, from the Executive branch of the Federal government. The basic law is found in the FD&C Act, and the regulations are found in the Code of Federal regulations.

How does the new 2012 FDA authority help consumers?

As explained above in 2012, the FDA was given authority by FDASIA to collect user fees to fund innovator drugs, etc. This process promotes innovation to speed patient access to safe and effective products, increases stakeholder involvement in FDA processes, and enhances the safety of the drug supply chain.

Just as important, FDASIA improves the agency’s ability to help prevent drug shortages. Recently in 2015, the FDA issued a final rule requiring all manufacturers of certain medically important drug and biologic products to provide the FDA with early notification of potential drug shortages and to report potential reasons for that potential shortage. The FDA says the number of drug shortages has nearly tripled, jumping from 61 drug products in 2005 to 178 in 2010. These shortages do not include shortages of vaccines, immune globulin products, and other biologics, or products made from blood, tissue, or other biological source.

Innovation is being promoted under FDASIA through greater patient engagement, includinga five-yearPatient Focused Drug Development programto learn from patients about the impact of their disease on their daily lives. As this strategy makes clear, knowledge and understanding of a patient’s perspective on disease are critical. But equally significant is the importance of ensuring adequate data quality and transparency in research to develop new treatments.

What are the different branches of the FDA?

The FDA is divided into five major Centers:

1. Center of Biologics Evaluation and Research (CBER),

2. Center for Devices and Radiological Health (CDRH),

3. Center for Drug Evaluation and Research (CDER),

4. Center for Food Safety and Applied Nutrition (CFSAN), and

5. Center for Veterinary Medicine (CVM).

Each center has its own origins and history, the oldest being CBER, which oversees blood products, vaccines, and newer therapeutics related to stem cells and gene therapy. The CDER receives the most scrutiny as this center regulates pharmaceutical medicines.

Under the CDER branch, the Office of Medical Policy (OMP), which oversees the Medical Policy Council (MPC), was created. The responsibility of the MPC includes the following:

Direct the development of policy, regulations, and guidances intended to communicate and implement consistent, standard policies and procedures related to medical policy for internal and external use.

Establish and oversee working groups to accomplish specific assessments and projects.

Review work products (e.g., documents and recommendations) of working groups before they are circulated for clearance.

Promote and coordinate internal and/or external communication of medical policy decisions when appropriate.

Develop agency-wide communications on medical policy decisions when appropriate.

Examples of MPC issues and challenge resolution work includes the development of an appropriate control regimen when a new product has already been adopted by the medical community as the standard of care for a new off-label indication; approaches to new indications proposed by industry sponsors; and/or standards of evidence for prophylaxis where efficacy and safety may not be testable in humans, such as prevention of anthrax.

What does FDA approval mean?

It is important to recognize that it is never a drug or other product, such as a device, that is approved or not approved, but a claim about the use of the drug or other product. The claim is granted a marketing license, which is, in effect, a product label.

Neither the FDA nor the Federal government regulates the practice of medicine. Any approved drug or product may be used by a licensed practitioner for uses other than those stated in the product label.

What is the FDA approval process for devices?

Essentially, medical equipment, devices, and supplies are subject to general controls, which are the baseline necessary for marketing, proper labeling, and monitoring performance once the product is available to the American public. The FD&C Act provides several mechanisms to achieve this goal, including the classification of devices, establishment of registration, device listing, adherence to Good Manufacturing Practices (GMPs), and extensive control over market introduction of devices. Thus, any individual engaged in the manufacture, preparation, propagation, compounding, assembly, and/or processing of a medical device intended for human use is subject to this regulatory process enforced by the FDA. Medical device regulation is based on the concept of risk. The following steps list the process to medical device approval:

Step One – The marketing process to make absolutely sure that the product to be marketed is a medical device, that it meets the definition of a medical device, and that the product is registered properly.

Step Two – The determination by the FDA of the device classification. Unless exempt, the FDA will classify the product. The classification identifies the level of regulatory control that is necessary to assure safety and efficacy of the product. In addition, the classification will identify, unless exempt, the marketing process the manufacturer must complete in order to obtain FDA clearance and approval before marketing. This may include review of the manufacturer’s Good Manufacturing Practices (GMPs), assuring quality systems in the manufacturing plants and enforcement of activities.

1. Class I – devices of least risk, under general control, such as band-aids, examination gloves, and hand-held surgical instruments.

2. Class II – devices presenting greater concern, under general and special control, subject to post market surveillance studies or adherence to performance standards, such as glucose monitors, wheel chairs, and infusion pumps.

3. Class III – devices, under general control and the Premarket Approval (PMA) process, which include many implanted and life-supporting or life-sustaining products that are subject to the most stringent controls and requirements. This includes a comprehensive premarket review, such as implantable pacemaker pulse generators and left ventricular assist devices.

Step Three – The development of data and/or information necessary to submit a marketing application, through requisite design, engineering bench tests as needed, and data from animal and/or human clinical trials. Then the manufacturer may obtain FDA clearance to market.

What is the FDA approval process for drugs or biologicals?

The drug approval process from a laboratory to the market shelves is usually long with varied routes of exploration. Often a drug is developed to target a specific disease, while others are discovered by accident. Most drugs undergo pre-clinical animal laboratory testing or trials, never advancing to human clinical trials or review by the FDA. If a drug does advance to the FDA, a rigorous evaluation begins by scrutinizing the clinical trial design, the severity of adverse effects, the manufacturing conditions, the labeling instructions, and the drug distribution and regulations. The following stages list the process to drug approval:

Stage One: Animals Tested – Drug manufacturer or sponsor applies to the FDA by submitting an Investigational New Drug (IND) Application. The FDA must be shown the results of pre-clinical testing and the proposals for human testing. The FDA determines whether it is safe to move forward with drug testing on humans.

Stage Two: IND Application – Drug studies in humans can begin only after the IND is reviewed by the FDA and a local institutional review board (IRB). The IRB is responsible for approving the clinical trial protocols, to mandate the participants have given consent and are fully informed of the risks, and to direct researchers take appropriate steps to protect participants from harm.

Stage Three: Phase 1 – Phase 1 studies, usually conducted in healthy participants, are done to determine what the drug’s most frequent side effects are and how the drug is metabolized and excreted. Typically, the number of subjects range from 20 to 80.

Stage Four: Phase 2 – Phase 2 studies start if Phase 1 studies don’t reveal unacceptable toxicity. The emphasis of Phase 2 studies is on effectiveness, or whether the drug works in people who have a certain disease or condition. In controlled trials, patients receiving the drug are compared with similar patients receiving a different treatment, e.g., placebo or a different drug. Additionally, there is continued evaluation of safety and short-term side effects. The number of subjects in Phase 2 studies typically ranges from a few dozen to about 300. At the end of Phase 2, the FDA and the sponsors meet to discuss how large-scale studies in Phase 3 will be done.

Stage Five: Phase 3 – Phase 3 studies begin if evidence of effectiveness is shown in Phase 2 studies. These studies gather more information about safety and effectiveness, studying different populations and dosages, and using the drug in combination with other drugs. Usually the number of subjects range from several hundred to about 3,000 people.

Stage Six: Review Meeting – The FDA meets with the drug sponsor in preparation for submission of a New Drug Application (NDA).

Stage Seven: NDA Application - The formal step is for the drug sponsor to request the FDA’s consideration in approving a new drug for marketing in the U.S., via a New Drug Application (NDA). The NDA includes all the animal and human testing data and analysis of data as well as information about the drug’s behavior in the participant’s body, and how the drug will be manufactured. A review team of physicians, chemists, statisticians, microbiologists, pharmacologists, and other experts evaluates the studies the sponsor submitted showing the drug is safe and effective for its proposed use. The FDA may call on an advisory committee of outside experts to review the NDA and make their recommendations. Traditional approval requires that clinical benefit be shown before approval can be granted. Accelerated approval is given to some new drugs for serious and life-threatening illnesses that lack satisfactory treatments. This allows an NDA to be approved before the required measures of effectiveness are available.

Stage Eight/Nine: Application Reviewed – After an NDA comes in, the FDA has 60 days to decide whether to file it so that it can be reviewed. The FDA can refuse to file an application that is incomplete. The expectation of the FDA’s CDER is to review and act on at least 90% of NDAs for standard drugs no later than 10 months after the applications are received. The review goal for priority drugs is six months.

Stage Ten: Drug Labeling – The FDA reviews the drug’s professional labeling and assures appropriate information is communicated to health care professionals and consumers.

Stage Eleven: Facility Inspection – The FDA inspects the facilities where the drug will be manufactured.

Stage Twelve: Drug Approval – FDA reviewers will approve the application or issue a response letter.

What is the 510(k) clearance process?

From 1976 going forward, any product that was found to be essentially similar to one that was marketed prior to May 28, 1976 was basically “grandfathered in.” This is known as the 510(k) clearance process, and the manufacturer is only required to demonstrate the new product is essentially similar to a product that was marketed prior to 1976. When a product passes through the 510(k) clearance process, the FDA states that it has “cleared” the product for marketing, not approved it, but this distinction is not always made in everyday practice.

For example, the common over-the-counter (OTC) drug, Aspirin, originated in Germany prior to World War I. After the war, the U.S. and other countries did not officially recognize the patent held by the German manufacturer on Aspirin; therefore, this allowed U.S. manufacturers to make Aspirin under various brand names. Any drug marketed before 1938 received “grandfather” status as the manufacturers did not have to show efficacy. Then again, prior to 1976, any drug that was similar did not require testing and was cleared by the FDA under the 501(k) clearance process and “grandfathered”. Of note, there is not one true “brand” of Aspirin. If any manufacturer had applied to market Aspirin for use with new indications in 1976 or after, it may have been designated as a prescription only drug.

What is the Premarket Approval (PMA) process?

In the PMA process, the manufacturer is required to provide the FDA with clinical data regarding the safety and effectiveness of the product. Typically, this data is generated through an investigational device exemption (IDE) trial that has been reviewed by the FDA. The manufacturer presents the data to an FDA advisory committee. The committee votes on a recommendation for further action to the FDA. If the advisory committee recommends for approval, the FDA takes the recommendation under advisement and issues their final determination sometime after the advisory committee meeting. The time frame is unpredictable, ranging from a month to over a year. Frequently, there is publicity when the advisory committee recommends approval, but final FDA approval, if given, occurs later.

What is FDA de novo classification?

The Food and Drug Administration Modernization Act of 1997 (FDAMA) added the de novo classification option as an alternate pathway to classify novel devices of low to moderate risk that had automatically been placed in Class III after receiving a “not substantially equivalent” (NSE) determination in response to a premarket notification [510(k)] submission. Section 513(f)(2) of the FD&C Act was amended by section 607 of the Food and Drug Administration Safety and Innovation Act (FDASIA), on July 9, 2012, to allow a sponsor to submit a de novo classification request to the FDA for novel low to moderate risk devices without first being required to submit a 510(k).

There are two options for de novo classification for novel devices of low to moderate risk.

Option 1: Any person who receives an NSE determination in response to a 510(k) submission may, within 30 days of receipt of the NSE determination, submit a de novo request for the FDA to make a risk-based evaluation for classification of the device into Class I or II.

Option 2: Any person who determines that there is no legally marketed device upon which to base a determination of substantial equivalence may submit a de novo request for the FDA to make a risk-based classification of the device into Class I or II, without first submitting a 510(k) and receiving an NSE determination.

Devices that are classified through the de novo process may be marketed and used as predicates for future 510(k) submissions.

What the special designations assigned for FDA approvals?

Humanitarian Device Exemption (HDE) – This exemption applies to devices that would otherwise be subject to the PMA process, but are intended to treat relatively rare diseases, affecting less than 4,000 patients per year. This process recognizes the fact that it may be difficult to recruit adequate numbers of patients to participate in clinical trials, and thus, the FDA requires the manufacturer to submit data regarding the safety of the device and the “probable” benefit.

Orphan Product Designation (OPD) – An Orphan Drug is defined in the 1984 amendments of the Orphan Drug Act as "a drug intended to treat a condition affecting fewer than 200,000 persons in the United States or will not recover development cost, plus a reasonable profit, within seven years following FDA approval. The Orphan Drug Act was signed into law on January 4, 1983."

Why would the FDA not approve a product claim?

There are a number of reasons the FDA may not approve a product claim, including:

Insufficient evidence to support the claim,

The risks are considered unacceptable, or

The FDA and the sponsor cannot come to an agreement about the scope or wording of the claim.

For example, the majority of oncology drugs that are not approved on the basis of the first initial application are subsequently approved upon resubmission of study data or revision of the claim.

Glossary of Terms

Abbreviated New Drug Application (ANDA) – A simplified submission permitted for a duplicate of an already approved drug. ANDAs are for products with the same or very closely related active ingredients, dosage form, strength, administration route, use, and labeling as a product that has already been shown to be safe and effective.

Accelerated Approval – A highly specialized mechanism intended to speed approval of drugs promising significant benefit over existing therapy for serious or life-threatening illnesses.

Active Ingredient – Any component that provides pharmaceutical activity or other direct effect in the diagnosis, treatment, cure, or prevention of disease or affect the structure or function of the body.

Action Letter – An official communication from the FDA to NDA sponsor that informs of a decision by the agency.

Advisory Committee – A panel of outside experts convened periodically to advise the FDA on safety and efficacy issues about FDA-regulated products. The FDA is not bound to take the committee’s recommendations, but usually does.

Approval Letter – An official communication from the FDA to NDA sponsor that allows for commercial marketing of the product.

Bioequivalence – Scientific basis on which generic and brand-name drugs are compared.

Brand Name Drug (BND) – A drug marketed under a proprietary, trademark-protected name.

Clinical Studies – Human studies designed to distinguish a drug or device’s effect from other influences.

Cosmetic – Articles intended to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body for cleansing, beautifying, promoting attractiveness, or altering the appearance of the individual.

Device – see Medical Device.

Discontinued Drug – A drug product that has been removed from the market in the U.S. for reasons other than safety or efficacy.

Drug – Articles intended to diagnose, treat, cure, or prevent disease and articles (other than food) as well as intended to affect the structure or any function of human or animal body.

Drug Form/Product – The finished dosage form (tablet, capsule, etc.) that contains a drug substance.

Drug Shortage – An inadequate supply of medically necessary drugs that are used to treat or prevent a serious disease or medical condition for which there is no alternative medicine available.

Drug Substance – The active ingredient intended to diagnose, treat, cure, or prevent disease or affect the structure or function of the body, excluding other inactive substances used in the drug product.

Effectiveness – The desired measure of a product’s influence on a disease condition.

FDA Action Date – Date when any FDA regulatory action was taken, such as an original or supplemental approval took place.

FDA Application Number – This number, also known as NDA number, is assigned by the FDA staff to each application for approval to market a new drug in the U.S. One drug can have more than one application number if it has different forms or routes of administration.

FDA Approval or Clearance – The product itself is approved or not approved, but the claim about the product has been granted a marketing license, a product label.

Generic Drug – The same as a brand name drug in dosage, safety, strength, method of administration, quality, performance, and intended use.

Good Clinical Practices (GCPs) – These are the regulations and requirements that must be complied with while conducting a clinical trial. These regulations apply to the manufacturers, sponsors, clinical investigators, institutional review boards, and the medical device.

Good Manufacturing Practices (GMPs) – These are the regulations and requirements that domestic or foreign manufacturers must have to provide quality systems for the design, production, manufacture, packaging, labeling, storing, installation, and servicing of finished medical devices intended for commercial distribution in the U.S.

Investigational Device Exemption (IDE) – This process allows for the investigational device to be used in a clinical study in order to collect safety and effectiveness data required to support and complete the marketing approval process.

IDE Trials – These studies are frequently randomized controlled trials that may produce high quality data. Some IDE trials focus on the final health outcomes; others may focus on the outcomes selected for that trial or intermediate patient outcome.

Investigational New Drug Application (IND) – An application that a drug sponsor must submit to the FDA before beginning tests of a new drug on humans. The IND contains the plan for the study and is supposed to give a complete picture of the drug, including structural formula, animal test results, and manufacturing information.

Label – The official description, approved by the FDA, of a product which includes the indication (what is it used for), who should use or take it, any adverse effects, instructions for use in pregnancy, children, and other populations, and safety information.

Market Device Safety Alert – This alert is issued in situations where a medical device may present an unreasonable risk of substantial harm. In some cases, these situations also are considered recalls.

Marketing Status – Indicates how a product is sold in the U.S., such as prescription, over-the-counter, discontinued, or none.

Market Withdrawal – The product is withdrawn from the market when the product has a minor violation that would not be subject to FDA legal action. The manufacturer removes the product from the market, corrects the violation, and returns the product to the manufacturer.

Medical Device – A product that is marketed as an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other related articles, component parts, or accessories. Medical devices range from tongue depressors to complex programmable pacemakers.

New Drug – A drug first investigated or proposed for marketing after 1938. Any drug manufactured before that date is not generally recognized as safe and effective.

New Drug Application (NDA) – An application requesting FDA approval to market a new drug for human use in the interstate commerce. The application must contain, among other things, data from specific technical viewpoints for FDA review, including chemistry, pharmacology, medical, biopharmaceutics, statistics, and anti-infective microbiology.

Over-The-Counter (OTC) – A product that is safe and effective for use by the general public without a physician’s prescription.

Pharmacology – The science that deals with the effect of drugs on a living organism.

Post-Marketing Surveillance (PMS) – The FDA’s ongoing safety monitoring of marketed products.

Preclinical Studies – Studies that test a drug on animals and other nonhuman test systems. They must comply with the FDA’s good laboratory practices. Data about a drug’s activities and effects in animals help establish boundaries for safe use of the drug in subsequent human studies (clinical studies). Also, because animals have a much shorter lifespan than humans, valuable information can be gained about a drug’s possible toxic effects over an animal’s life cycle and on offspring.

Recall – Recalls are actions taken by a manufacturer to remove a product from the market. Recalls may be conducted on a manufacturer’s own initiative, by FDA request, or by FDA order under statutory authority.

Registration of Food Facilities – A new U.S. regulation, published October 10, 2003, in response to the Bioterrorism Act, which, among other requirements, ordered domestic and foreign facilities that manufacturer, process, pack, or hold food for human or animal consumption in the U.S. to register with the FDA by December 12, 2003.

Safety – No drug or device is completely safe or without the potential for side effects or harm. For example, before a drug may be approved for marketing, the law requires the submission of results of adequate tests to show the drug is safe under the conditions of use in the proposed labeling. Thus, “safety” is determined case by case and reflects the drug’s risk-versus-benefit relationship.

Shortage – see Drug Shortage.

Significant Risk Device (SRD) – An investigational device that presents a potential for serious risk to the health, safety, or welfare of a patient; however, it is still used to support or sustain human life and represents a potential for serious risk or used in the diagnosis, treatment, cure, or prevention of a disease.

Transitional Device (TD) – A device the FDA had previously regulated as a new drug or an antibiotic drug before May 28, 1976.

Treatment IND – A mechanism that allows promising investigational drugs to be used in “expanded access” protocols. These protocols are relatively unrestricted studies in which the intent is both to learn more about the drugs, especially their safety, and to provide treatment for people with immediate life-threatening or otherwise serious diseases for which there is no real alternative.

User Fees – Charges to drug firms for certain NDAs, drug products, and manufacturing establishments. The FDA uses these fees to hire more application reviewers and to accelerate reviews through the use of computer technology.


While there may be exceptions, most benefit plans or health contracts specifically exclude coverage for the patient’s use of equipment, drug(s), device(s), or supply(s) when used:

During a clinical trial or study, and/or

For purposes or in a manner other than the service was intended, and/or

For cosmetic or not medically necessary indications or conditions, and/or

In instances considered to be experimental, investigational and/or unproven.


Each benefit plan, summary plan description or contract defines which services are covered, which services are excluded, and which services are subject to dollar caps or other limitations, conditions or exclusions. Members and their providers have the responsibility for consulting the member's benefit plan, summary plan description or contract to determine if there are any exclusions or other benefit limitations applicable to this service or supply. If there is a discrepancy between a Medical Policy and a member's benefit plan, summary plan description or contract, the benefit plan, summary plan description or contract will govern.



Disclaimer for coding information on Medical Policies

Procedure and diagnosis codes on Medical Policy documents are included only as a general reference tool for each policy. They may not be all-inclusive.

The presence or absence of procedure, service, supply, device or diagnosis codes in a Medical Policy document has no relevance for determination of benefit coverage for members or reimbursement for providers. Only the written coverage position in a medical policy should be used for such determinations.

Benefit coverage determinations based on written Medical Policy coverage positions must include review of the member’s benefit contract or Summary Plan Description (SPD) for defined coverage vs. non-coverage, benefit exclusions, and benefit limitations such as dollar or duration caps.


The following codes may be applicable to this Medical policy and may not be all inclusive.

CPT Codes




ICD-9 Diagnosis Codes

Refer to the ICD-9-CM manual

ICD-9 Procedure Codes

Refer to the ICD-9-CM manual

ICD-10 Diagnosis Codes

Refer to the ICD-10-CM manual

ICD-10 Procedure Codes

Refer to the ICD-10-CM manual

Medicare Coverage:

The information contained in this section is for informational purposes only. HCSC makes no representation as to the accuracy of this information. It is not to be used for claims adjudication for HCSC Plans.

The Centers for Medicare and Medicaid Services (CMS) does not have a national Medicare coverage position. Coverage may be subject to local carrier discretion.

A national coverage position for Medicare may have been developed since this medical policy document was written. See Medicare's National Coverage at <>.


1. – Statement on Medical Devices by Michael Friedman, M.D. April 30, 1997. U.S. Food and Drug Administration. <>.

2. – Swann, J.P. History of the FDA. 1998. U.S. Food and Drug Administration. <>.

3. – Statement on Medical Devices by Elizabeth D. Jacobson, Ph.D. March 25, 1999. U.S. Food and Drug Administration. <>.

4. – Recalls: Background and Definitions. February 13, 2002. U.S. Food and Drug Administration. <>.

5. – Is It a Cosmetic, a Drug, or Both? (Or Is It Soap?). July 8, 2002. U.S. Food and Drug Administration. <>.

6. – Meadows, M. The FDA’s Drug Review Process: Ensuring Drugs are Safe and Effective – FDA Consumer Magazine. September 10, 2002. U.S. Food and Drug Administration. <>.

7. – Getting To Market with a Medical Device – Device Advice. October 1, 2002. U.S. Food and Drug Administration. <>.

8. – Is the Product a Medical Device – Device Advice. October 1, 2002. U.S. Food and Drug Administration. <>.

9. – Device Class – Device Advice. November 21, 2002. U.S. Food and Drug Administration. <>.

10. – Drug Approval Application Process – Center for Drug Evaluation and Research. May 14, 2003. U.S. Food and Drug Administration. <>.

11. – Review Process – Device Advice. June 11, 2003. U.S. Food and Drug Administration. <>.

12. – Introduction: IDE Overview – Device Advice. July 8, 2003. U.S. Food and Drug Administration. <>.

13. – Good Manufacturing Practices (GMP)/Quality System (QS) Regulation– Device Advice. January 28, 2004. U.S. Food and Drug Administration. <>.

14. – Classify Your Medical Device – Device Advice. August 8, 2004. U.S. Food and Drug Administration. <>.

15. – Drugs @ FDA – Glossary of Terms. September 10, 2004. U.S. Food and Drug Administration. <>.

16. Overview of FDA Medical Device Approval Process. Chicago, Illinois: Blue Cross Blue Shield Association – Technology Evaluation Center Medical Policy Clearinghouse News (2004 August 27) Archives.

17. – Orphan Product Designation. September 27, 2005. U.S. Food and Drug Administration. <>.

18. – Significant Dates in U.S. Food and Drug Law History. November 6, 2012. U.S. Food and Drug Administration. <>.

19. – FDA Basics. March 6, 2014. U.S. Food and Drug Administration. <>.

20. – Affordable Care Act (ACA 6004). August 22, 2015. U.S. Food and Drug Administration. <>.

21. – Food and Drug Administration Safety and Innovation Act (FDASIA). August 22, 2015. U.S. Food and Drug Administration. <>.

22. – Office of Medical Policy. August 22, 2015. U.S. Food and Drug Administration. <

23. –The FDA’s Drug Review Process: Ensuring Drugs are Safe and Effective. November 6, 2014. U.S. Food and Drug Administration. <>.

24. –Evaluation of Automatic Class III Designation (De Novo) Summaries. June 5, 2017. U.S. Food and Drug Administration <>.

Policy History:

7/15/2018 Reviewed. No changes.
7/15/2017 Document updated with literature review. Coverage unchanged.
8/1/2016 Reviewed. No changes.
11/1/2015 Document updated with literature review. Coverage unchanged.
4/15/2014 Document updated with literature review. Coverage unchanged.
3/15/2013 Document updated with literature review. Coverage unchanged.
6/15/2008 Policy reviewed without literature review; new review date only. This policy is no longer scheduled for routine literature review and update.
5/1/2006 New medical document

Archived Document(s):

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