Radar on Drug Benefits

  • CMS Spends Billions on Drugs Granted FDA Accelerated Approval With Unproven Clinical Benefits

    Through 2020, CMS spent $68 billion on 38 drugs that were granted accelerated approval from the FDA between 2012 and 2017, with spending after conversion to standard approval accounting for 75% of overall spending, according to a JAMA Health Forum study. However, only 34% of these drugs had a confirmatory trial evaluating a clinical outcome as a primary end point and more than $40 billion was spent for drugs evaluated using surrogate end points. Clinical trials for one drug that converted to standard approval (pembrolizumab) and three that remained unconverted (atezolizumab, durvalumab and olaratumab) for their original indications failed to confirm benefit for primary efficacy end points, while these drugs cost CMS $14 billion in total through 2020. The researchers concluded that “persistent evidentiary gaps should prompt payers to limit spending on promising drugs with unproven benefits.”
  • News Briefs: Launch Prices Grew Dramatically in Recent Years

    Between 2008 and 2021, drug launch prices increased by 20% per year, according to new research published in JAMA. In 2020 and 2021, prices rose 11% each year, even after adjusting for manufacturer discounts. In addition, nearly half of all drugs launched in the last two years initially cost at least $150,000 per year. “Rising brand-name drug prices often translate to payers restricting access, raising premiums, or imposing unaffordable out-of-pocket costs for patients,” the study’s authors observed.

    An opinion article published in the New England Journal of Medicine argued that the 340B drug program creates “perverse incentives” for preexposure prophylaxis (PrEP) medications that prevent HIV infection by encouraging safety-net clinics to prescribe the most expensive PrEP treatments. The article observes that “insurers reimburse 340B clinics for medications at an amount close to their list price; the difference between the list price and the discounted 340B price results in revenue — known as the ‘340B spread’ — that clinics can allocate toward other health services. The higher the drug’s price, the bigger the spread….The high cost of PrEP medications has made 340B central to the ability of some safety-net clinics…to provide HIV-prevention and other services....Brand-name oral medications for PrEP, Descovy and Truvada… produc[e] a spread of as much as $1,600 per patient per month. That revenue can fund...important services provided by 340B clinics.” That results in “costs to the health care system that far exceed the clinical benefits.”

  • Biden Administration Has Options for Drug Pricing Reform

    Democratic lawmakers are discussing a plan that would allow CMS to negotiate the price of certain medications and place a cap on Medicare beneficiaries’ out-of-pocket spending, an effort they hope could lead to the resuscitation of the drug pricing controls contained in the Build Back Better Act (BBBA). While those talks are far from a sure thing to pass, the Biden administration could institute policies to combat high drug prices that do not need congressional approval, according to health policy experts who participated in a Kaiser Family Foundation (KFF) webinar on May 23.

    Rachel Sachs, an attorney and professor at the Washington University School of Law in St. Louis who spoke during the webinar, said the administration could particularly make an impact in federal insurance programs such as Medicare and Medicaid. One way could be via the approval of certain Section 1115 Medicaid waivers that states request. For instance, in Oregon’s Section 1115 renewal application in February, the state asked CMS for permission to exclude from its Medicaid formulary drugs approved under the FDA’s accelerated approval program that have “limited or inadequate evidence of clinical efficacy.”

  • Court Decision on Accumulator Rule Could Encourage State Bans

    Under a May 17 court decision striking down a CMS final rule slated to take effect in 2023, pharmaceutical manufacturers will not have to ensure that financial assistance provided to patients goes only to patients and not to payers under their copay accumulator and maximizer programs. However, the renewed attention to these programs could spur more states to take action of their own against them, industry experts tell AIS Health.

    The Accumulator Rule (CMS-2482-F), published Dec. 31, 2020, could have resulted in patients facing increased out-of-pocket drug costs and pharma companies being held responsible for ensuring they know exactly where their assistance is going, industry experts tell AIS Health, a division of MMIT.

  • Third-Party Care Pathways Gain Steam as Cancer Costs Rise

    With the costs of treating cancer patients rising ever higher, payers and providers are increasingly turning to third-party pathways — or treatment protocols designed to provide the optimal therapy regimens — to improve outcomes and reduce excess costs. But not all pathways are created equal, and it’s crucial for oncology drug manufacturers to understand their nuances if they want to ensure their therapies are able to reach the most patients.

    Those are the main takeaways from a recent “Meet the Expert” webinar from MMIT, AIS Health’s parent company. “It’s really key to get optimal placement of a brand on a pathway to ensure that patients can have access to these lifesaving therapies,” said Yana Faykina, senior consultant, advisory services at MMIT.

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