4 Ways Medicaid Could Manage High-Price Drugs

How State Medicaid Programs are Managing Prescription Drug Costs: Results  from a State Medicaid Pharmacy Survey for State Fiscal Years 2019 and 2020  | KFF

Source: Fierce Healthcare, by Frank Diamond

Private payers can just say “no.” So can Medicare. Medicaid, however, must say “yes.”

Medicaid must provide coverage for any medication approved by the Food and Drug Administration (FDA), even those medications approved under the FDA’s accelerated approval program (AAP), which are often very expensive medications that lack complete clinical data, according to a special commentary in JAMA Health Forum.

For the most part, the authors said, suggestions for addressing the problem focus on the FDA approval process. Policymakers might also want to consider better reimbursement systems for payers when it comes to medications that secure accelerated approval, the article said.

The accelerated approval program was created in 1992 to speed up the approval process for medications to fight HIV/AIDS. However, over the past decade, the AAP has shifted more into oncological medications and other niche areas. States worry that their Medicaid programs might be crushed by the high prices of some drugs.

Take Alzheimer’s disease drug aducanumab. Approved under the AAP, aducanumab came to market with a $56,000 annual price tag and serious questions about its efficacy.

Private insurers can exclude drugs from their formularies, and many did just that for aducanumab.

“Medicare has the authority to limit coverage for drugs that are not reasonable and necessary, a rarely used power it applied regarding aducanumab due to the lack of reported clinical benefits when weighed against the potential for harm,” the article said. “But state Medicaid programs lack these authorities and are generally legally required to cover essentially all FDA-approved drugs, including accelerated approval products, despite their lack of supporting clinical evidence.”

The authors of the JAMA Open Forum article suggest four possible ways to fix this problem: formulary exclusions, Medicaid rebate reform, value-based pricing and consolidated purchasing.

Formulary exclusions

Give Medicaid the power to exclude AAP drugs from its formulary on the grounds that they have not been proven to have medical efficacy, the authors said. That could be done through waivers, something that Massachusetts and Oregon have already applied for.

The Centers for Medicare & Medicaid Services (CMS) already rejected Massachusetts’ request, although legal scholars argue against CMS’ reasoning.

The government could create a national process to determine whether Medicaid must cover certain drugs or allow Medicaid to simply mirror Medicare’s determinations, the authors wrote. But Medicare and Medicaid aren’t interchangeable, and the authors note that “although enabling state Medicaid programs to adopt Medicare’s coverage determinations would be useful for a product like aducanumab, it would be less useful for products with high Medicaid market share but little Medicare exposure, such as eteplirsen or hydroxyprogesterone caproate.”

Medicaid rebate reform

The Medicaid and CHIP Payment and Access Commission (MACPAC) proposes that drugs approved under the AAP be sold at an increased rebate that would decrease only with greater evidence of efficacy. MACPAC also proposes that the prices account for inflation.

“The MACPAC proposal would likely require legislation, and its effectiveness depends on the size of the increase in the rebates; however, this proposal is likely less administratively complex than other strategies because it builds on an existing rebate structure,” the article said. “The proposal targets products that have not yet converted to traditional approval and could encourage the timely completion of confirmatory trials.”

Also, as Fierce Healthcare reported recently, expect pushback from drug companies.

Value-based pricing

This involves a review of the clinical data on medications and tying the price to what it seems to be worth at certain points along that review. It would involve comparing the AAP medication with other drugs used to treat the same conditions to help determine whether the newer drug is worth the price.

“These approaches are used by many other countries to ascertain appropriate pricing for new drugs, and they permit payers to balance the prices that are paid while clinical evidence develops,” the study said.

Consolidated purchasing or carve-outs

The authors suggested examining the possibility of creating a federal insurance program for cell and gene therapies for rare diseases.

“The goal would be to shift the financing of these medications to the federal government by increasing the federal share of Medicaid spending to 100% either for all accelerated approval products or rare disease products alone,” the article said. “Under some of these proposals, access could be managed through a rare disease fund for all patients regardless of payer type.”

Each of these four suggestions comes with challenges and drawbacks, but all could possibly be a solution for states trying to deal with ever more expensive medications that they now must currently cover, the authors said.

“The types of proposals that we have described could provide a range of options for policymakers to evaluate trade-offs of access and pricing associated with the accelerated approval program,” the article said.

FDA Approves First Treatment To Delay Onset Of Type 1 Diabetes

FDA approves first treatment to delay onset of type 1 diabetes | Health |  abc12.com

Source: CNN Health, by Jen Christensen and Brenda Goodman

A biologic therapy that delays the onset of type 1 diabetes received approval from the US Food and Drug Administration on Thursday.

It is the first therapy approved for prevention of type 1 diabetes.

The monoclonal antibody teplizumab, which will be marketed under the brand name Tzield, from ProventionBio and Sanofi is given through intravenous infusion. The therapy will carry a wholesale cost of roughly $194,000 for a full course of treatment, the drug’s manufacturer said in an investor call on Friday, although this is not expected to be the price consumers would pay.

It is thought to work by turning down the body’s misdirected attack on its own insulin-producing cells. The idea is that protecting these cells buys people more time before they become dependent on insulin to manage their condition.

In clinical trials, Tzield delayed progression to full-blown diabetes by a little over two years. But the benefits have lasted much longer in some of the study participants.

One of them, Mikayla Olsten, was screened for diabetes after her 9-year old sister, Mia, suddenly developed a life-threatening episode of diabetic ketoacidosis and was diagnosed with diabetes. There was no history of diabetes in the family, and Mikayla wasn’t sick, but she had four of the five types of autoantibodies that doctors look for to assess a person’s risk.

“They told us when somebody has that many markers, it’s not if they’re going to develop diabetes, it’s when,” said her mom, Tracy.

Mikayla was 15 when she joined the study and received teplizumab. She’s now 21 and a senior in college. She gets an annual battery of tests to check her pancreas and blood markers, and Tracy Olsten says her condition hasn’t progressed in six years.

According to a scientific statement from JDRF, the Endocrine Society and the American Diabetes Association, when a person has markers for autoimmune disease and episodes of uncontrolled blood sugar, the five-year risk for progression to insulin-dependent symptomatic disease is 75%. The lifetime risk of developing insulin-dependent diabetes is nearly 100%.

So far, Mikayla seems to be beating those odds.

Tracy said that for Mia, who is dependent on insulin, managing her diabetes is a constant chore.

“She has a tremendous amount of juggling that her peers don’t have to do. She has to plan ahead when she has a basketball game or practice on making sure she carbs up and decreases her insulin levels,” Tracy said. “She cannot go a minute or a day without thinking about it nonstop, and to be able to give Mikayla the opportunity where she doesn’t have to think about it 24/7 is amazing.”

‘Screening becomes a really big issue’

Aaron Kowalski, CEO of JDRF, says the main challenge in prescribing Tzield will be finding people who need it. The drug is approved for people who don’t have any symptoms of the disease and may not know they’re on the road to getting it.

“Screening becomes a really big issue, because what we know is, about 85% of type 1 diagnoses today are in families that don’t have a known family history,” Kowalski said. “Our goal is to do general population screening” with blood tests to look for markers of the disease.

Tzield is approved for use in people 8 and older who are in stage 2 of their type 1 diabetes. In that stage, doctors can measure antibodies that attack insulin-producing beta cells in the person’s blood, and they have abnormal blood sugar levels, but their body can still make insulin.

“The way in which not just industry but our medical system go about managing autoimmune diseases, and especial type 1 diabetes, is really suboptimal in today’s day and age,” ProventionBio co-founder and CEO Ashleigh Palmer said. “What we do is, we wait until the symptoms of the disease present to doctors, and then doctors treat the patient’s symptoms chronically for a lifetime. The trouble is that in type 1 diabetes, when the symptoms first present, it’s too late.”

The treatment comes in a single 14-day course of infusions that each last 30 to 60 minutes.

The most common side effects reported in the trial participants were low white blood cells and lymph cells, rash and headache.

The first option for preventing type 1

With type 1 diabetes, a person’s immune system attacks cells called beta cells in the pancreas that produce insulin, a hormone that helps blood sugar enter cells, where it’s used for energy. The attack can happen for years before any symptoms of diabetes appear. Without insulin, blood sugar can build up in the bloodstream and break down the body’s own fat and muscle.

Palmer says Tzield holds off the disease before symptoms appear by stopping the autoimmune disease process and the underlying destruction of beta cells. The treatment essentially reboots the immune system, preserving beta cell function.

“We really have no preventative measure for type 1 diabetes to date, and that is despite [the National Institutes of Health] funding hundreds of millions of dollars over the last 20-plus years of a program called TrialNet that has tested many, many different things, including this, and some of this came out of that work,” said Dr. Robert Gabbay, chief scientific and medical officer for the American Diabetes Association. “Finally, there is something that delays the onset of type 1 diabetes, and it’s so exciting.”

Unlike type 2 diabetes, which can be prevented with lifestyle changes like losing weight and exercising, type 1 is a genetic disease that has not had any prevention options until now.

“For some reason, we don’t screen for type 1 diabetes, even though there are biomarkers available to show that the autoimmune disease process is already underway,” Palmer said. He added that the hopes the drug will catalyze the medical system to start population-based screening during routine childhood well visits in order to intercept the disease and delay its onset.

With Tzield, doctors would screen individual family members of people with type 1 diabetes to see whether they have those specific antibodies. If antibody levels are high and it appears that the person is about to develop diabetes, the treatment will delay that process.

“If somebody has type 1, a common question that comes up is ‘well, what about my child? Are they going to develop type 1?’ It’s only about a 5% risk, so more often than not, they won’t, but if you could find the ones that would and treat them, that can make a big difference,” Gabbay said.

The potential to help millions

A delayed diagnosis of type 1 diabetes could have a significant impact.

“Obviously, the quality of life is substantially impacted, negatively impacted, if you are diagnosed with type 1 diabetes. It’s a disease that never goes away,” Palmer said.

People who are type 1 diabetics must monitor their blood glucose levels around the clock, affecting how they exercise and eat. High blood sugar can lead to diabetic ketoacidosis, in which the body starts to break down fat as its fuel, and can cause a buildup of acids called ketones in the bloodstream. That condition can lead to hospitalization, coma or death.

As of 2019, about 1.9 million people have type 1 diabetes in the United States, according to the American Diabetes Association, including 244,000 children and adolescents. Type 1 affects 8% of everyone with diabetes.

“The incidence of the type 1 is mainly in kids and teenagers, and when you are in the turmoil of adolescence, when you just want to forget that you have it,” said Olivier Bogillot, Sanofi’s head of US general medicines. “So when you have the ability with a treatment to just delay the onset of the disease, you can change the way the quality of life is impacted for families and for those kids.”

Last Updated 11/30/2022

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