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.

Adap­tive De­sign Meth­ods Of­fer Rapid, Seam­less Tran­si­tion Be­tween Study Phas­es in Rare Can­cer Tri­als

Rare cancers account for 22 percent of cancer diagnoses worldwide, yet there is no universally accepted definition for a “rare” cancer. Moreover, with the evolution of genomics and associated changes in categorizing tumors, some common cancers are now characterized into groups of rare cancers, each with a unique implication for patient management and therapy.

Adaptive designs, which allow for prospectively planned modifications to study design based on accumulating data from subjects in the trial, can be used to optimize rare oncology trials (see Figure 1). Adaptive design studies may include multiple cohorts and multiple tumor types. In addition, numerous adaptation methods may be used in a single trial and may facilitate a more rapid, seamless transition between study phases.

Marianne De Backer (L) and Jeff Hatfield

Bay­er nabs star biotech Vi­vid­ion with a $2B buy­out and an ‘arms-length’ pact, pulling a part­ner out of the IPO con­ga line

Vividion is canceling that IPO it filed. Instead of following the industry-wide migration to Nasdaq, the biotech that has captured considerable attention for its still-preclinical work finding cryptic pockets to bind to on proteins is going to work for Bayer now.

The pharma giant is putting out word today that it has bought out Vividion for $1.5 billion in cash and another half-billion dollars in milestones.

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Tadataka Yamada (Photographer: Kiyoshi Ota/Bloomberg via Getty Images)

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Tadataka Yamada, a towering physician-scientist who made his name in academia before transforming drug development at GlaxoSmithKline and developing vaccines for malaria and meningitis at the Gates Foundation, died unexpectedly of natural causes at his home in Seattle Wednesday morning.

He was 76. Frazier Healthcare Partners’ David Socks confirmed his death.

Known widely by the mononym “Tachi,” Yamada had a globetrotting career and arrived in industry relatively late in life. A 2004 Independent article noted GSK had asked Yamada to stay on beyond his approaching 60th birthday, the company’s usual retirement age. Yamada would continue working for the next 17 years, steering the Gates Foundation’s global health division for 6 years, funding Jim Wilson’s gene therapy work when few would touch it, launching Takeda Vaccines and co-founding a series of high-profile biotechs.

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When a drugmaker raises the price of a drug in the US by more than 2,000% overnight, and without any particular reason for that increase, nothing typically happens to the company. No fines, no court orders, just business as usual.

Martin Shkreli’s decades-old anti-parasitic drug Daraprim was the perfect example — massive price spike on an old drug, lots of media attention, public outcry, Congressional committees dragging his former company through multiple hearings, and at the end of it? Nothing happened to the price or the company (until generic competition came).

Josh Hoffman, outgoing Zymergen CEO (Zymergen)

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Zymergen, just months off a $500 million IPO that put the synthetic bio firm in rarified air, has now ejected its founding CEO and downgraded its revenue forecasts after customers reported its lead film product doesn’t work as advertised, the company said Tuesday afternoon.

CEO Josh Hoffman will leave his role and sacrifice his board seat immediately in favor of Jay Flatley, the former CEO of Illumina who will take the lead role on an interim basis as the company conducts a search for its next leader.

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Bio­gen, Ei­sai are push­ing for an­oth­er ac­cel­er­at­ed Alzheimer's OK — this time for BAN2401

Now that the door at the FDA has been opened wide for Alzheimer’s drugs that can demonstrate a reduction in amyloid, Biogen and its partners at Eisai are pushing for a quick OK on the next drug to follow in the controversial path of aducanumab.

In a presentation to analysts, Eisai neurology chief Ivan Cheung outlined some bullish expectations for their newly-approved treatment and set the stage for what he believes will be a fast follow for BAN2401 (lecanemab) — after a dry spell in new drug development that’s lasted close to 20 years.

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Thomas Lingelbach, Valneva CEO

A small vac­cine de­vel­op­er fa­vored by the UK gov­ern­ment in Covid-19 touts a PhI­II first in chikun­gun­ya

Before Valneva garnered the favor of the UK government as a potential supplier of Covid-19 vaccines, the French biotech prided itself on being the first company to bring a chikungunya vaccine into Phase III.

It now has positive pivotal results to back up the breakthrough therapy designation the FDA granted just weeks ago.

There are currently no approved jabs to prevent chikungunya virus infection despite decades of R&D efforts, a fact that underscores just how arduous traditional vaccine development can be, particularly for neglected tropical disease. In a absence of a major commercial market, the US government and NGOs such as CEPI have deployed various grants and incentives to spur on a small crew of academics and industry players, with Merck, via its acquisition of Themis, claiming a spot in that race.

Zymergen co-founders Zach Serber, Josh Hoffman, and Jed Dean (Zymergen via website)

Zymer­gen's sud­den im­plo­sion shocked biotech. A lin­ger­ing loan could make things even worse

As former synbio unicorn Zymergen picks up the pieces from its spectacular implosion Tuesday, an outstanding loan from Perceptive Advisors — the only blue-chip biotech crossover investor to touch Zymergen’s fundraising efforts — could make the situation worse, according to public documents.

In December 2019, more than a year before Zymergen filed for what would eventually become a $500 million IPO, the “biofacturing” firm signed a $100 million credit facility with Perceptive to help supplement the nearly $700 million the company had raised across four VC rounds.

Janet Woodcock (Bill Clark/CQ Roll Call via AP Images)

HHS ex­tends Aduhelm in­ves­ti­ga­tion in­to the ac­cel­er­at­ed ap­proval path­way, wad­ing in­to a brew­ing con­tro­ver­sy

The government investigation into how the FDA approved Aduhelm appears to point well beyond the agency’s ties with Biogen in the leadup to its approval of their controversial Alzheimer’s drug Aduhelm.

The HHS Office of Inspector General posted a notice Wednesday that officials will review the accelerated approval pathway, the regulatory mechanism the agency used to approve the drug in the face of conflicting data over whether it could actually slow Alzheimer’s patients’ mental decline. Now the Aduhelm OK is just one branch of an investigation called for last month by acting FDA commissioner Janet Woodcock.

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