Curtailing Medicaid coverage of accelerated approval therapies threatens patients’ access
To improve their COVID-battered fiscal situations, some states are looking to cut Medicaid, which makes up nearly one-third of average state spending and whose enrollment increased by about 15 percent last year.
Specifically, states like Massachusetts and Tennessee are seeking federal approval to curtail Medicaid coverage of prescription drugs that have received accelerated government approval. At its meeting last month, The Medicaid and CHIP Payment and Access Commission (MACPAC) voted to recommend that Medicaid programs demand higher rebate payments from drug manufacturers for these accelerated medications as a condition of maintaining Medicaid coverage. Such reform would allow states to curtail their coverage of these medications, threatening patient access. It’s now up to Congress whether to accept this recommendation.
Threatening state coverage of these medications could cause significant pain for society’s most vulnerable — patients like Teonna with rare and chronic conditions — in return for little to no fiscal gain. According to a recent analysis published in the American Journal of Managed Care, the cost of therapies that receive accelerated approval makes up just 0.6 to 0.8 percent of total annual Medicaid spending.
State legislators should look elsewhere to improve their fiscal health before threatening the health of their residents by curtailing coverage of their medications. And Congress should ignore MACPAC’s recommendations in favor of reforms that can actually help states rein in their spending.
Currently, Medicaid requires states to cover all drugs approved by the Food and Drug Administration, including those granted accelerated approval due to their early evidence in significantly improving clinical outcomes. (These medications still must complete the standard full FDA review to maintain their spot on drug formularies, and the vast majority of them are subsequently confirmed safe and effective.)
This fast-track approval process has delivered numerous new medications, providing a lifeline to countless American patients since the program started in 1992. The unprecedented success of COVID-19 vaccination development and Operation Warp Speed reinforce the life-altering importance of such accelerated approvals.
The program has been especially beneficial for patients like Teonna who have sickle cell disease, a red blood cell disorder that affects roughly 100,000 Americans. In November 2019 and February 2020, the FDA granted accelerated approval to two new breakthrough sickle cell treatments. These accelerated approvals are helping correct the historical stigmas and disparities associated with this disease, which disproportionately impacts people of color.
Unfortunately, Teonna is severely allergic to these new therapies, and her body has rejected a bone marrow transplant. She depends on the accelerated approval pipeline as her best hope to eventually provide access to a life-changing therapy and, one day, even a cure. But drug innovators are less likely to invest the billions of dollars that it takes to develop new medications if they don’t believe that governments and insurance companies will fully cover them if they’re successful.
Once the precedent for not covering these cutting-edge drugs is set, other payers may quickly follow suit.
Cost-cutting governments and insurance companies have these medications in their crosshairs because they rely on surrogate, rather than final, clinical benefit markers. According to the Kaiser Family Foundation, most states are attempting to reform their coverage of accelerated approval therapies. The National Governors Association recently called on federal officials to allow “state Medicaid programs to exclude … select fast-tracked, first-in-class drugs that lack sufficient data on safety and efficacy.”
Given that these medications account for less than one percent of Medicaid spending each year, restricting them is penny-wise but pound-foolish. When you consider their role in keeping patients out of hospitals, they almost surely save Medicaid programs a significant amount of money.
Like countless Americans with rare and chronic diseases, Teonna’s best hope for an improved lifestyle with fewer symptoms is cutting-edge new treatments. Curtailing Medicaid coverage for accelerated approvals by raising rebate demands could make the difference in whether patients like her can access them or not.
Terry Wilcox is the executive director of Patients Rising. Teonna Woolford is the CEO of The Sickle Cell Reproductive Health Education Directive.
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