FDA, Opinion, Policy

As FDA looks to speed reviews even more, 2 policy experts want to restrict the price of drugs that win an accelerated OK

Even after the FDA added regulatory pathways for drug developers to win accelerated approvals for new drugs, the political pressure in Washington to speed up drug reviews continues to grow.

In testimony before a House subcommittee yesterday, FDA commissioner Scott Gottlieb assured lawmakers that biomarkers, new technologies and more efficient trial designs made it possible to shorten the regulatory process as he vowed to urge all the FDA to replicate the fast pace of the agency’s oncology division, which has reconfigured cancer drug development programs over the past 3 years.

But should drugs approved early with only part of the data that was once required for an OK be able to fetch the full retail price that manufacturers expect today?

Two health policy experts say no.

Aaron Kesselheim

Walid Gellad

In an op-ed for The New England Journal of Medicine, Walid Gellad from the University of Pittsburgh and Harvard’s Aaron Kesselheim argue that any biopharma company that wins an accelerated approval should be subject to certain price restrictions. And they’ve offered a few examples of how that could work. You could, for example:

— Require drug makers to offer public payers a set discount on drugs that get an early OK ahead of confirmatory studies. Medicaid could get a statutory price reduction on top of the discounts it already qualifies for.

— Hold a portion of the revenue from these drugs in escrow, until they prove they work as assumed based on the preliminary data. Drug makers can win it on a positive Phase III, or lose it all as the cash is used to reimburse payers.

— To avoid any gaming of this system, hiking the wholesale price to make sure sellers make what they want from the discounted figure, manufacturers could be forced to switch to a cost-plus system, with set margins.

The authors also call for a new system where developers are held accountable to seeing their late-stage trials through on schedule. A system of rewards and penalties can be put in place for companies as they set out to achieve specific milestones in their studies. And no more long runways, they say. New trials should start within months of an accelerated OK. And these confirmatory studies should be expected to wrap in a reasonable amount of time, not extend for years into the future.

We believe there should be plans in place to begin confirmatory trials within 3 months after approval, with tracking of trial progress through ClinicalTrials.gov. Though the rarity of the disease and other factors might reasonably affect trial accrual times, there should also be meaningful repercussions for missing milestones such as having a protocol in place or hitting recruitment targets, culminating in withdrawal of the drug if the trial is unnecessarily delayed for an extended period. The FDA can, under current law, assess financial penalties or withdraw an accelerated-approval drug from the market if the manufacturer fails to conduct its confirmatory trial or fails to do so with “due diligence,” a benchmark that the FDA can further clarify with stakeholder input.

Even more controversially, they suggest that an economic impact study should be used to evaluate these drugs after one or two years on the market, to see if the value of a drug given an accelerated approval is lost to the financial turmoil it can cause.

As far as the industry is concerned, there isn’t anything here that would slip under the radar. It would all be fought tooth and nail. Aggressive government regulations restricting prices and governing trials is anathema to biopharma, which much prefers voluntary restraint in the US. But as the debate over drug prices continues to boil in Washington DC, it’s another set of “solutions” likely to trigger fresh debate at a time accelerated approvals may just be getting started.


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RAPS Regulatory Convergence 2017