Plans to put limits on the FDA’s Accelerated Approval pathway would reduce the number of new treatments hitting the market, with a particularly negative impact on drugs for rare diseases, according to a study released yesterday.
Proposals to delay Medicaid coverage of Accelerated Approval therapies on the state level would have an adverse impact on between 66,000 and 319,000 patients, and possible federal changes would risk the withdrawal of potential therapies that “would have addressed the needs of 850,000 to 3.6 million patients,” the study by Vital Transformation found.
“The proposed changes to coverage for Accelerated Approval drugs could render the development of therapies for many untreated rare diseases economically untenable—while creating minimal cost savings and only increasing the burden of rare diseases on society at large. It’s a lose-lose scenario for all,” said Amanda Malakoff, Executive Director of the Rare Disease Company Coalition.
The study looked at the impacts of suggestions to limit the Food and Drug Administration (FDA) Accelerated Approval pathway, a program to give patients early access to drugs, especially for serious rare diseases that have no other treatments. Under Accelerated Approval, treatments for an unmet need can enter the market before they complete final clinical trials if they are proven effective against a “surrogate endpoint,” a laboratory measurement giving a reasonable indication that the drug will work. Accelerated Approval drugs still must be confirmed effective in Phase III clinical trials, which can take place after the drug is on the market.
Pressure to change the Accelerated Approval pathway has come at the federal and state levels, and the FDA seems ready to unilaterally change its policy, creating threats to a well-functioning program.
Critics have said that some companies delay their confirmatory clinical trials for Accelerated Approval drugs beyond a reasonable five-year limit. But this criticism is not realistic according to the Vital Transformation study of all 206 drugs granted Accelerated Approval that received, or are still awaiting, final confirmation, since the pathway was established in 1992.
“Actually in our statistical analysis, what we’ve found is the overwhelming majority of accelerated approval drugs, 75%, have their evidence pack and are approved by the FDA within four years,” said Duane Schulthess, CEO of Vital Transformation.
Vital Transformation’s analysis also found that the few Accelerated Approval drugs that took more than five years to confirm efficacy were predictable by the smaller size of their patient population.
This is an issue because 82% of Accelerated Approvals are for orphan indications, rare cancers and other diseases with fewer than 200,000 U.S. patients, according to Schulthess. He explained that, with so few patients, putting together clinical trials takes longer.
Orphan drugs for rare diseases are also likely to have a lower net present value (NPV), which impacts whether companies can invest in developing the drugs at all. Patients with rarer conditions, including many types of cancer, are therefore the ones who will suffer from changes to Accelerated Approval, Schulthess said.
“If changes to the Accelerated Approval pathway occur this could render the development of those therapies economically untenable,” according to the report.
State 1115 waivers pose a threat
Changes to the accelerated approval pathway that threaten drug development plans are being considered by several states. Oregon recently applied for a Section 1115 Medicaid waiver, which would allow the state to refuse Medicaid coverage for Accelerated Approval drugs. That application was declined, but other states may be considering similar waivers.
The apparent reason for states to seek such waivers is to reduce Medicaid spending, but the Vital Transformation report identified a flaw in that reasoning. “The average budget impact of Accelerated Approval therapies as a percentage of state Medicaid spending is one-half of one percent, 0.5%, across all 50 US states and DC,” according to the report.
Vital Transformation performed a retrospective analysis to determine what would happen if states were allowed to go through with suggested plans that would delay Medicaid coverage for drugs on the accelerated approval pathway.
“A three-year delay in Medicaid access in 15% of states (by spending) resulted in 18%-42% of our therapies having a negative NPV, which would therefore render development unlikely,” the analysis found. “Should a three-year delay come to fruition, between 66,000 and 319,000 state Medicaid program beneficiaries would lose access to new treatments with neurology and oncology being the most impacted.”
Other risks to the Accelerated Approval pathway
The FDA appears ready to make changes in the way it handles Accelerated Approval in what Schultess said is in an apparent effort to placate criticism from the HHS and Congress. The FDA recently “provided strong guidance” to ADC Therapeutics that they would have to have plans in place for a confirmatory Phase III trial before receiving accelerated approval for their new drug for Hodgkin lymphoma, a rare form of cancer, ADC Therapeutics reported.
This is a shift from normal policy, as Phase III trials often happen many years after receipt of Accelerated Approval, and if the FDA makes this standard policy, it would be very likely to discourage development of some drugs, Schultess said.
“What the impact of that will be, we don’t know—we haven’t run the numbers. But, it’s sort of acting in many ways as a tax,” he said, noting that it can cost a half billion dollars or more to run a Phase III clinical trial. “This just means that you’re going to have to frontload some of the cost on your economic plan. And you’re going to have to have more cash on hand.”
Another scheme, put forth by the Medicaid and CHIP Payment and Access Commission (MACPAC), would lower the returns on drug development by requiring increased payments under the Medicaid Drug Rebate Program (MDRP) in exchange for Medicaid coverage of Accelerated Approval drugs. The Vital Transformation study found that immediate impacts of this policy would be to put one therapy for HIV and one for cancer at risk, depending on the size of the final agreed rebate.
“Today’s increased understanding of rare disease and advances in targeted drug development are making it possible to realize the promise of Accelerated Approval for rare diseases where current treatments don’t yet exist, yet these policies could be detrimental to realizing this potential,” says a press release from Vital Transformation.