Accelerated Approvals Under Scrutiny
In April 2021, the Oncologic Drugs Advisory Committee (ODAC), a group of advisors to the US Food and Drug Administration (FDA) responsible for evaluating the safety and efficacy of oncology therapies recommended the agency maintain four of six recent cancer immunotherapy accelerated approvals despite a lack of confirmatory evidence of benefits.
Drugs launched with Accelerated Approval Pathway (AAP) are often specialty, oncology or orphan drugs targeting significant unmet medical needs, as AAP was designed for. These drugs are also often high priced.
The distinguishing feature of AAP is its reliance on surrogate endpoints, intermediate measures that are considered “reasonably likely” to predict clinical outcomes. Drugs with accelerated approval are subject to post marketing requirements to confirm their efficacy and safety. If a drug fails to do so, the FDA can withdraw its conditional OK. Yet, FDA has been criticized for not holding drugmakers to the terms of the AAP. In almost 30 years since the introduction of AAP, only 6% of accelerated cancer drug approvals have been withdrawn.
Compounding the uncertainty created by reliance on surrogate end points is the growing use of single- arm studies to support regulatory approval. Furthermore, the confirmatory evidence required to convert accelerated approval to full approval is often slow to materialize.
Against this backdrop, in April 2021, the Medicaid and CHIP Payment and Access Commission (MACPAC) voted 16-1 to recommend to Congress that they consider an increased Medicaid rebate for AAP drugs until these drugs have verified the clinical benefit through confirmatory trials.
Shortly after, the Institute of Clinical and Economic Review (ICER), an independent non-profit HTA organization in the US with growing influence among payers, published a whitepaper discussing policy proposals to strengthen AAP. The watchdog argues drugs with accelerated approvals should be priced to account for the significant uncertainty associated with their evidence base at the time of launch. In addition to urge the FDA to improve its consistency in the application of evidentiary standards when it comes to AAP approvals, ICER recommends that payers and manufacturers should consider increasing federal rebate levels until time of full approval, use pricing at marginal cost to incentivize completion of confirmatory trials, and base payment on outcomes. The watchdog concedes each proposal has its pros and cons and decision-makers need to evaluate in their totality.
References:
FDA faces tough choice after panel backs speedy cancer drug approvals, BiopharmaDive, 4/30/2021, https://www.biopharmadive.com/news/fda-advisory-meeting-cancer-immunotherapy-accelerated-approvals/599376/, (Accessed 5/22/21)
April 2021 MACPAC Public Meeting, https://www.macpac.gov/public_meeting/april-2021-macpac-public-meeting/?sfw=pass1622231909, (Accessed 5/28/21)
STRENGTHENING THE ACCELERATED APPROVAL PATHWAY:AN ANALYSIS OF POTENTIAL POLICY REFORMS AND THEIR IMPACT ON UNCERTAINTY, ACCESS, INNOVATION, AND COSTS, ICER, 4/26/21, https://icer.org/wp-content/uploads/2021/04/Strengthening-the-Accelerated-Approval-Pathway-_-ICER-White-Paper-_-April-2021.pdf (Accessed 5/28/21)
Free Pricing Period in Germany Likely Halved
Since January 2011, market access for innovative pharmaceuticals in Germany is governed by the Act of the Reform of the Market for Medicinal Products (Arzneimittelmarktneuordnungsgesetz [AMNOG]).
AMNOG has kept the principle of free pricing at launch, i.e., drug manufacturers are free to establish a drug’s price within the first 12 months of launch.But the law imposes a formal assessment of the “added therapeutic benefit” of new medicines by the Federal Joint Committee (G-BA) to support reimbursement price negotiations between the Association of Statutory Health Insurance Funds (‘GKV-SV’)
Premium reimbursement price can only be established if a drug has some added therapeutic benefit.If no additional therapeutic benefit can be established, the drug will be allocated to an existing reference price group if one exists, or the negotiated reimbursement price must generally not exceed the annual costs of the comparator treatment.The G-BA determines the appropriate comparator. Patients will be responsible for any difference between the reference-based reimbursement level and a drug’s higher market price.
Despite the added therapeutic benefit assessment for new drugs is already saving Germany’s health insurers over €3 billion annually – 50% more than anticipated when AMNOG was introduced a decade ago, due to increasing financial pressure on Germany’s sick funds, G-BA is now reproposing to halve free pricing period for new drugs to 6 months from 12 months as G-BA typically completes its benefit assessment within 6 months and to retroactively apply the negotiated reimbursement price from the time G-BA gave its benefit rating (month 7 – 12).Manufacturers need to pay a rebate to sick funds if the negotiated reimbursement price is lower than the product’s launch price.This idea of limiting free pricing period was first introduced by G-BA and politicians before 2016.
If you are interested in learning more about pricing and reimbursement of innovative drugs in Germany, check out our earlier issue of AccessMonitor here.
References:
What will happen to free pricing and Orphan Drugs in Germany after the election?, Partners Access, 3/29/21, https://partners4access.com/24206-2/, (Accessed 5/28/21)
On AMNOG’s 10th Anniversary, G-BA’s Hecken Questions Whether 1-Year Free Pricing Is Too Long, EVERSANA, 3/22/21, https://www.eversana.com/2021/03/22/on-amnogs-10th-anniversary-g-bas-hecken-questions-whether-1-year-free-pricing-is-too-long/, (Accessed 5/28/21)
Drug Pricing Shake Up Likely In Germany, Pink Sheet, 5/18/21, https://pink.pharmaintelligence.informa.com/PS144336/Drug-Pricing-Shake-Up-Likely-In-Germany, (Accessed 5/28/21)
340B Saga Continues with the Biden Administration’s First Major Action
In a May 17 statement, the Health Resources and Services Administration (HRSA) made plain “manufacturers who restrict covered entity access to medications because of the use of contract pharmacies”, a major controversy in the 340B disputes between drug manufacturers and covered entities, “are in direct violation of 340B statues.” Additionally, in its letters to six manufacturers, the agency demanded each manufacturer to provide HRSA an update on its plans to lift restrictions on covered entity access to drugs by June 1, 2021; and any continued restriction of access to 340B pricing based on covered entities use of contract pharmacies may result in Civil Monetary Penalties against the manufacturers.
The 340B drug discount program is unique to the US pharmaceutical marketplace and an important topic for understanding many dynamics of drug pricing. The program, named for the legislation that created it in 1992 (section 340B of the Public Health Service Act), requires manufacturers to sell outpatient prescription drugs to safety net providers, called covered entities, that primarily serve low-income and uninsured individuals, at a discounted price no higher than the net price paid by Medicaid in order to have their medicines covered by Medicaid and Medicare Part B.
The program was designed to address an unintended consequence of the 1990 Medicaid rebate law - the requirement to provide Medicaid with rebates equal to the lowest price in the market (the “best price”) resulted in manufacturers no longer offering voluntary discounts to safety net providers.
In 2010, through draft guidance HRSA, which is part of the Department of Health and Human Services (HHS) and oversees the 340B program, removed the restriction on 340B entities using only one contract pharmacy, leading to growth in 340B dispensing. 340B contract pharmacies have grown from 3000 locations in 2010 to over 20,000 in 2017. Six large chains account for two out of three 340B contract pharmacy. Reports repeatedly show that 340B covered entities and their contract pharmacies share in 340B profits but, in most cases, do not share 340B discounts with uninsured patients at contract pharmacies.
Beginning this past summer, a number of pharmaceutical manufacturers implemented policies that generally limit the ability of 340B covered entities to use contract pharmacies to access 340B discounts for the manufacturers’ covered outpatient drugs.
Dec. 30, 2020, the HHS Office of General Council published an Advisory Opinion (AO) responding to these recent developments. The AO, non-binding in nature and is currently under litigation, claims that the 340B statute itself requires a participating manufacturer to honor contract pharmacy arrangements since “This fundamental requirement is not qualified, restricted, or dependent on how the covered entity chooses to distribute the covered outpatient drugs. All that is required is that the discounted drug be ‘purchased by’ a covered entity. In this setting, neither the agency nor a private actor is authorized by section 340B to add requirements to the statute.” HRSA’s May 17th statement echoes the AO precisely.
Just days after HHS set a June 1 deadline for manufacturers to lift contact pharmacy restrictions, Eli Lilly filed a motion in an Indiana district court to stop HHS in its tracks challenging the legality of the June 1st deadline.
If you are interested in a more comprehensive review on 340B pricing program, please check out our earlier issue of AccessMonitor here.
References:
Biden Administration Throws Down Its First Gauntlet on 340B, Mintz, https://www.lexology.com/library/detail.aspx?g=aa529f9a-5e2b-48c2-821c-1fbbad875b10, (Accessed 5/28/21)
Eli Lilly sues HHS to halt any 340B-related monetary penalties, End Points, https://endpts.com/eli-lilly-sues-hhs-to-halt-any-340b-related-monetary-penalties/, (Accessed 5/28/21)