WASHINGTON, D.C.—A new Medicare payment model isn’t intended to step on the toes of the Food and Drug Administration, just make sure Medicare gets the best bang for its buck, a top official said.
The Center for Medicare and Medicaid Innovation (CMMI) unveiled three model concepts last month aimed at lowering drug prices. A CMMI official further detailed a model focused on how Medicare pays for drugs approved by the FDA’s accelerated approval pathway, which hastens the clearance of products intended to address an unmet medical need.
The problem is that drugmakers aren’t finishing required clinical trials to confirm the product’s effectiveness after getting accelerated approval, said Laura McWright, deputy director of the Seamless Care Models Group for CMMI. CMMI’s proposed model would reduce Medicare payments for drugs that don’t finish such trials, giving companies an incentive to do so.
“If FDA allows more rapid access, I think we also have to acknowledge that not every drug will yield a clinical benefit for patients,” said McWright during AHIP’s 2023 Medicare, Medicaid, Duals & Commercial Markets Forum in Washington, D.C., Tuesday. “Those studies are … really important.”
McWright said that current data shows only about a third of drugs that have been granted accelerated approval meet the initial deadlines for completion.
Medicare and Medicaid spend a fair amount on these drugs. A previous study conducted by Johns Hopkins Bloomberg School of Public Health showed that Medicare spent $1.8 billion on drugs that didn’t have completed confirmatory trials in 2019.
The goal of the model, which has not been fully proposed yet, is to not interact with FDA’s safety or efficacy reviews.
“Those are really beyond CMMI’s scope,” McWright said. “What we are trying to do is to test the effect of adjusting payment for these drugs and looking at the impact on manufacturers completing their trials on a timely basis.”
The model though has gotten pushback from Republicans in Congress who believe CMMI is attempting to undermine the FDA’s accelerated approval pathway.
A group of 18 Senate Republicans charged the model could “chill incentives for leveraging the FDA’s game-changing expected regulatory avenue, which has served patients with life-threatening diseases for decades.”
The accelerated approval model is one of three the center has designed to comply with an executive order by President Biden. Another model seeks to offer certain high-value generic drugs at $2 cost-sharing for Medicare patients and a third model would help states band together to buy pricey cell and gene therapies.