Med­ic­aid com­mis­sion to Con­gress: In­crease re­bates for ac­cel­er­at­ed ap­proval drugs

As the FDA con­tin­ues to ap­prove more new drugs un­der its ac­cel­er­at­ed ap­proval path­way, the non-par­ti­san Med­ic­aid and CHIP Pay­ment and Ac­cess Com­mis­sion (MAC­PAC) is telling Con­gress to in­crease the statu­to­ry Med­ic­aid re­bates for such drugs un­til their clin­i­cal ben­e­fits have been ver­i­fied.

High­er re­bates for drugs with ac­cel­er­at­ed ap­provals, a move op­posed by the bio­phar­ma in­dus­try, would mean low­er net prices, less­en­ing their fi­nan­cial bur­den on the health care sys­tem while in­cen­tiviz­ing the com­pa­nies to speed the ver­i­fi­ca­tion of the drugs’ clin­i­cal ben­e­fits in con­fir­ma­to­ry tri­als. Once those ben­e­fits are con­firmed, the com­pa­nies would re­turn to the low­er re­bates when the ac­cel­er­at­ed ap­proval is con­vert­ed in­to a full ap­proval, MAC­PAC sug­gests.

“The Com­mis­sion is not rec­om­mend­ing a spe­cif­ic in­crease in the re­bates but notes that the amount needs to be sig­nif­i­cant enough to pro­vide a mean­ing­ful re­duc­tion in spend­ing and pro­vide a strong in­cen­tive to en­cour­age com­ple­tion of the con­fir­ma­to­ry tri­al, but not so large as to dis­cour­age de­vel­op­ment of drugs for con­di­tions that dis­pro­por­tion­ate­ly af­fect Med­ic­aid ben­e­fi­cia­ries,” MAC­PAC said in its June re­port to Con­gress.

The push to rein in spend­ing on drugs win­ning ac­cel­er­at­ed ap­proval comes as the FDA re­cent­ly grant­ed such an ap­proval for Bio­gen’s new Alzheimer’s drug Aduhelm, which is priced at $56,000 per year and could quick­en CMS’ path to in­sol­ven­cy while the com­pa­ny has 9 years to com­plete its con­fir­ma­to­ry tri­al.

And Aduhelm is not alone, from 2010 to 2015, net spend­ing on spe­cial­ty drugs in Med­ic­aid al­most dou­bled, grow­ing from $4.8 bil­lion to $9.9 bil­lion, MAC­PAC not­ed.

Mean­while, from 2015 to 2019, 31 drugs (14.1% of all ap­provals dur­ing that pe­ri­od) came through the ac­cel­er­at­ed path­way. By com­par­i­son, the same num­ber of drugs re­ceived ac­cel­er­at­ed ap­proval in the 10-year pe­ri­od of 2005 to 2014. But MAC­PAC notes that many of these con­fir­ma­to­ry tri­als for ac­cel­er­at­ed ap­provals can take a decade or longer to com­plete, leav­ing states on the hook for pricey treat­ments even as their clin­i­cal ben­e­fits are not con­firmed.

Mass­a­chu­setts and Ten­nessee have re­quest­ed Sec­tion 1115 demon­stra­tion waivers (and Ten­nessee’s re­quest has been ap­proved) to im­ple­ment a closed for­mu­la­ry, mean­ing that the state could choose to ex­clude cer­tain drugs or class­es of drugs.

“These states specif­i­cal­ly re­quest­ed au­thor­i­ty to ex­clude cov­er­age of ac­cel­er­at­ed ap­proval drugs be­cause state of­fi­cials be­lieve the high prices of these drugs do not lead to pru­dent fis­cal ad­min­is­tra­tion when the clin­i­cal ben­e­fit has yet to be ver­i­fied,” MAC­PAC said.

An­oth­er con­cern is that drug­mak­ers do not have the same fi­nan­cial in­cen­tives to com­plete these con­fir­ma­to­ry tri­als as they do with Phase III clin­i­cal tri­als, ac­cord­ing to MAC­PAC, and a neg­a­tive find­ing from a con­fir­ma­to­ry tri­al could re­duce a com­pa­ny’s rev­enues and re­sult in the re­moval of the drug from the mar­ket.

“When asked about the re­bate amount, most TAP [tech­ni­cal ad­vi­so­ry pan­el] par­tic­i­pants sug­gest­ed that the in­crease in the min­i­mum re­bate for ac­cel­er­at­ed ap­proval drugs should be high­er than the 8 per­cent­age point in­crease in the min­i­mum re­bate pro­vid­ed un­der the Pa­tient Pro­tec­tion and Af­ford­able Care Act,” the re­port says, leav­ing it up to Con­gress to de­cide on the specifics. “How­ev­er, too high a re­bate could dis­cour­age man­u­fac­tur­ers from in­vest­ing in the de­vel­op­ment of drugs for con­di­tions that dis­pro­por­tion­ate­ly af­fect Med­ic­aid ben­e­fi­cia­ries.”

In ad­di­tion to drugs ap­proved un­der the ac­cel­er­at­ed path­way, MAC­PAC al­so is seek­ing a new na­tion­al drug ben­e­fit for cell and gene ther­a­pies that could al­low for new cov­er­age, pay­ment, or re­bate re­quire­ments with­out dis­rupt­ing the struc­ture of the Med­ic­aid Drug Re­bate Pro­gram for all oth­er out­pa­tient drugs.

“One op­tion would be to cre­ate a cen­tral­ized, na­tion­al cov­er­age pool for these prod­ucts. A fed­er­al­ly ad­min­is­tered pro­gram would al­low stan­dard­iza­tion of cov­er­age and pay­ment rules across states and plans,” MAC­PAC says. “This mod­el could be de­signed to ad­dress sev­er­al con­cerns. For ex­am­ple, by in­creas­ing fed­er­al fund­ing for these prod­ucts and pool­ing pa­tients na­tion­al­ly to in­crease uti­liza­tion pre­dictabil­i­ty, it could help ad­dress states’ con­cerns about high up-front costs and bud­get volatil­i­ty.”

But the com­mis­sion stopped short of mak­ing any spe­cif­ic rec­om­men­da­tions to Con­gress on cell and gene ther­a­pies. MAC­PAC al­so con­duct­ed an analy­sis of the pipeline of new spe­cial­ty drugs for Med­ic­aid.

At the In­flec­tion Point for the Next Gen­er­a­tion of Can­cer Im­munother­a­py

While oncology researchers have long pursued the potential of cellular immunotherapies for the treatment of cancer, it was unclear whether these therapies would ever reach patients due to the complexity of manufacturing and costs of development. Fortunately, the recent successful development and regulatory approval of chimeric antigen receptor-engineered T (CAR-T) cells have demonstrated the significant benefit of these therapies to patients.

All about Omi­cron; We need more Covid an­tivi­rals; GSK snags Pfiz­er’s vac­cine ex­ec; Janet Wood­cock’s fu­ture at FDA; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

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Merck's new antiviral molnupiravir (Quality Stock Arts / Shutterstock)

As Omi­cron spread looms, oral an­tivi­rals ap­pear to be one of the best de­fens­es — now we just need more

After South African scientists reported a new Covid-19 variant — dubbed Omicron by the WHO — scientists became concerned about how effective vaccines and monoclonal antibodies might be against it, which has more than 30 mutations in the spike protein.

“I think it is super worrisome,” Dartmouth professor and Adagio co-founder and CEO Tillman Gerngross told Endpoints News this weekend. Moderna CEO Stéphane Bancel echoed similar concerns, telling the Financial Times that experts warned him, “This is not going to be good.”

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Pfiz­er, Am­gen and Janssen seek fur­ther clar­i­ty on FDA's new ben­e­fit-risk guid­ance

Three top biopharma companies are seeking more details from the FDA on how the agency conducts its benefit-risk assessments for new drugs and biologics.

While Pfizer, Amgen and Janssen praised the agency for further spelling out its thinking on the subject in a new draft guidance, including a discussion of patient experience data as part of the assessment, the companies said the FDA could’ve included more specifics in the 20-page draft document.

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Janet Woodcock (AP Images)

Janet Wood­cock plots her fu­ture at FDA, with se­nior ad­vi­sor role to fall back on if Califf wins con­fir­ma­tion

Acting FDA commissioner Janet Woodcock has been the face of just about every drug approval decision at the agency since the turn of the century. Since the pandemic began, she’s moved between the top of the drugs center to the head of therapeutics at Operation Warp Speed, leading the drive for work on Covid-targeted mAbs and antivirals.

Looking forward — and pending a quick Senate confirmation to cement Rob Califf’s return to the top of FDA early next year — Woodcock’s role at the agency will again be in flux.

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Richard Pazdur (via AACR)

Ac­cel­er­at­ed ap­proval re­forms need mean­ing­ful con­fir­ma­to­ry tri­al im­prove­ments, pro­fes­sors write in Sci­ence

Outside of Covid-19, 2021 has been the year of the accelerated approval.

Beginning last spring, FDA openly challenged six “dangling” accelerated approvals (hadn’t confirmed their clinical benefit yet), three of which were later pulled by the companies.

Then in June, FDA pulled out the accelerated approval pathway, seemingly out of nowhere, to sign off on Biogen’s controversial Alzheimer’s drug Aduhelm. It hadn’t even been mentioned at the drug’s adcomm.

Common performs onstage, December 2020 (Getty Images)

Com­mon, Jamie Foxx among celebs stand­ing up for clin­i­cal tri­als in star-stud­ded can­cer group's pan­dem­ic push

Healthcare screenings and clinical trial enrollment were battered by the pandemic. But the well-known celebrity-backed Stand Up To Cancer non-profit, along with pharma and advocacy partners, has been working to reverse that and make up lost ground, by stepping up awareness campaigns.

Twelve campaigns launched in 2020 and another five in 2021 amplify the need for cancer screening and care, especially for underserved communities. While pharma companies have long been donors to the cancer research group, Covid brought new support — and increased awareness efforts.

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Usama Malik

Ex-Im­munomedics CFO charged with in­sid­er trad­ing, faces up to 20 years in prison af­ter al­leged­ly tip­ping off girl­friend and rel­a­tives of a PhI­II suc­cess

The former CFO of Immunomedics, who helped steer the company to its $21 billion buyout by Gilead last year, has been charged with insider trading, the Department of Justice announced Thursday.

Usama Malik tipped off his then-girlfriend and four others that a Phase III study for Trodelvy would be stopped early four days before Immunomedics publicly announced the result in April 2020, DoJ alleged in its complaint. The individuals then purchased Immunomedics shares, selling them after the news broke and Immunomedics’ stock price doubled.

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Lisa Deschamps, AviadoBio CEO

Ex-No­var­tis busi­ness head hops over to a gene ther­a­py start­up — and she's reeled in $80M for a dash to the clin­ic

Neurologist and King’s College London professor Christopher Shaw has been researching neurodegenerative diseases like ALS and collaborating with drugmakers for the last 25 years in the hopes of pushing new therapies forward. But unfortunately, none of those efforts have come anywhere close to fruition.

“So, you know, after 20 years in the game, I said, ‘Let’s try and do it ourselves,’” he told Endpoints News.