New Analysis Finds Accelerated Approval Drugs Do Not Drive Medicaid Spending

Findings Published in Health Affairs Forefront

Precedent-setting policies to restrict access to accelerated approval drugs do not reduce health care spending but rather harm America’s most vulnerable patients

WASHINGTON--()--The Partnership to Fight Chronic Disease (PFCD) today released, “Quantifying Impact of Accelerated Approval Drugs on Medicaid Spending: An Update through 2020 and State-Level Analysis,” an updated and enhanced economic analysis examining the impact of the Food and Drug Administration’s (FDA) accelerated approval pathway on Medicaid spending. The findings were simultaneously published in a Health Affairs Forefront commentary titled "Accelerated Approval Drugs are Not Driving Medicaid Spending.” Authored by Kenneth Thorpe, PhD, Chair of PFCD and of the Department of Health Policy & Management for the Rollins School of Public Health at Emory University, the analysis found that drugs approved through the accelerated approval pathway accounted for less than one percent of annual Medicaid spending year-over-year between 2007 and 2020, on both the national and state level.

The key findings of the report include:

  • From 2007 to 2020, accelerated approval medicines accounted for well under one percent of total Medicaid spending, not including drug rebates.
  • At the national level, spending on accelerated approval drugs also accounted for just 0.5% of overall growth in national Medicaid spending between 2007 and 2020. Hospital spending (30%) and physician and clinical services (15.4%) were the primary drivers of growth. After accounting for drug rebates, retail prescription drugs accounted for 5.0% of growth.
  • Accelerated approval drugs accounted for less than 1% of the growth in Medicaid spending in 48 states and the District of Columbia. Only Alabama (1.3%) and South Dakota (2.1%) were slightly higher.
  • In states requesting Medicaid waivers due to cost concerns, 2020 spending data shows accelerated approval drug spend is miniscule - Massachusetts (0.1%), Tennessee (0.4%) and Oregon (0.1%).

The Health Affairs Forefront commentary, coauthored by Thorpe and Thomas Johnson, Principal, Johnson Health Ventures, and former CEO of Medicaid Health Plans of America, explores the findings through the lens of the ongoing debate about the pathway and its potential health equity implications.

The accelerated approval pathway delivers breakthrough treatments to millions of patients and families who are facing serious diseases with no options. In addition, the pathway has spurred invaluable research and development efforts in many fatal cancers and rare diseases, like sickle cell disease,” stated Thomas Johnson. “To compromise access to these treatments for Americans with Medicaid health coverage is bordering on unethical.”

Misunderstanding and misperceptions about accelerated approval have contributed to several recent and concerning proposals to alter the pathway itself and restrict coverage of accelerated approval drugs in the Medicare and Medicaid programs. For example, the Medicaid and CHIP Payment and Access Commission (MACPAC) recommended to Congress that manufacturer rebates be increased for certain drugs approved through the pathway. Similarly, several states, including Massachusetts, Oregon, and Tennessee, requested the ability to waive their federal requirement to cover accelerated approval medicines for patients reliant on Medicaid, often citing cost concerns. Notably, the Centers for Medicare and Medicaid Services’ (CMS) recent National Coverage Determination for a new class of Alzheimer’s treatments, singles out those relying on the accelerated approval pathway for differential, restrictive coverage treatment.

The accelerated approval pathway has become a red herring in the debate over drug prices. Given the tremendous impact of accelerated approval drugs on patients’ lives and the minimal impact found on Medicaid budgets, efforts to deny patients access to these therapies should be considered baseless, discriminatory, and counter-productive,” said Kenneth Thorpe. “Chronically ill patients with life-threatening diseases have no time to waste. That’s precisely why the FDA originally established the accelerated approval pathway, and it has worked as intended for 30 years, giving patients and their families faster access to safe and effective treatments where none previously existed.”

The report released today and the Health Affairs Forefront commentary build on the original analysis by Thorpe and the data-driven commentary co-authored by Thorpe and American Action Forum President Douglas Holtz-Eakin published in the American Journal of Managed Care in March 2021. Today’s update incorporates the latest available national spending data and adds a state-by-state analysis. For the full analysis and related resources, please visit: www.fightchronicdisease.org/resources/acceleratedapproval.

About the Accelerated Approval Pathway

Since 1992, the FDA’s accelerated approval pathway has delivered more than 270 treatments to patients with life-threatening diseases who previously had limited or no treatment options. The pathway was created to address unmet medical needs of people living with HIV/AIDS and over time extended it to include cancer treatments. In 2012, Congress modernized and enhanced the pathway to expand its use for rare diseases. The pathway employs the same rigorous standard for evaluating safety and efficacy as FDA’s traditional approval. Under accelerated approval drugs are approved based on a surrogate endpoint — a metric for which the evidence demonstrates is reasonably likely to predict clinical benefit – with a post-marketing confirmatory study requirement to verify the predicted clinical benefit. Accelerated approval is one of several FDA expedited approval programs. To learn more about the pathway and the patients who have been helped by accelerated approval treatments, please visit: https://www.fightchronicdisease.org/faces-accelerated-approval.

The Partnership to Fight Chronic Disease (PFCD) is an international coalition of patient, provider, community, business and labor groups, and health policy experts, committed to raising awareness of the number one cause of death, disability, and rising health care costs: chronic disease.

Contacts

Media:
Jennifer Burke
301.801.9847
Jennifer.Burke@fightchronicdisease.org

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Contacts

Media:
Jennifer Burke
301.801.9847
Jennifer.Burke@fightchronicdisease.org