Congress should give states the power to not pay full price under Medicaid for drugs approved under the Food and Drug Administration’s accelerated approval pathway, a key advisory panel said.
The Medicaid and CHIP Payment and Access Commission (MACPAC) released proposals for Congress as part of its March report last week (PDF). One of the key recommendations is to limit state coverage under Medicaid of drugs cleared via accelerated approval that have not completed a confirmatory trial. The recommendation is the latest tension point between Medicare and Medicaid regulators and the accelerated approval pathway.
“States have expressed concern about paying high prices for drugs approved through the accelerated approval pathway,” MACPAC’s report to Congress said.
Medicare can link coverage of an item or service to participation in a qualifying clinical trial. The Centers for Medicare & Medicaid Services (CMS) decided to apply this restriction to a class of Alzheimer’s disease drugs, the first of which is called Aduhelm and cleared under accelerated approval. CMS wanted to limit the coverage of the pricey drug to only Medicare beneficiaries in a qualifying clinical trial.
However, Medicaid does not have such flexibility. A state Medicaid program is required by the Medicaid Drug Rebate Program to “cover all of a participating manufacturer’s drugs when prescribed for a medically accepted indication,” MACPAC’s report said.
Congress should enable states to exclude or at least restrict coverage of a drug that is subject to Medicare’s evidence development requirements, the report added.
“Allowing states to link coverage of a particular drug to the collection of additional clinical data would help ensure that evidence of the clinical benefit can be developed in a timely manner and provide additional information on the benefits and risks of treatment in the Medicaid population,” the panel said.
Medicaid managed care organizations would also be required to follow any state’s decision to implement any such restrictions.
The recommendations come as drug spending in Medicaid has increased in recent years. From 2010 to 2015, net spending on specialty drugs in the program doubled from $4.8 billion to nearly $10 billion. It is also expected to increase between 5% and 6% over the next several years, according to federal actuaries.
MACPAC’s report is the latest point of tension between CMS, FDA and the drug industry surrounding how to cover accelerated approval drugs.
The pathway was created to hasten the approval of drugs that address an unmet medical need or improve on an existing treatment. Any drug cleared via the pathway has to complete a confirmatory trial to validate the drug’s effectiveness.
However, CMS has been worried about the lack of completion of such trials, which can at times take years.
The Center for Medicare and Medicaid Innovation (CMMI) recently proposed a payment model that cuts Medicare payments to accelerated approval drugs until the confirmatory trial finishes.
CMMI officials have said the goal of the model is not to undermine the FDA’s safety and efficacy regulations but to ensure that confirmatory trials are finished.
FDA Commissioner Robert Califf, M.D., told insurers at an AHIP forum last week that insurers must remove barriers that can stifle provider participation in postmarket trials. He added CMMI’s model seems like a good idea in general but more information is needed on how it will be structured.