Payer Coverage of Fast-Tracked Therapies: A Cautionary Tale
When a pharma company secures expedited approval for a drug in development, everyone involved is usually thrilled. After all, a faster approval process means that patients in need will be able to access this critical treatment more quickly. Manufacturers also assume that expedited approval will lead to faster revenue recognition, but this isn’t always true.
Many payers are reluctant to cover drugs approved via an expedited process due to insufficient safety and efficacy data. For drugs granted conditional approval, payers are also concerned about the potential for that approval to be revoked. As a result, some payers may postpone P&T review for six or twelve months, or until the FDA grants full approval after the manufacturer’s confirmatory study is complete.
To better understand payers’ point of view on expedited approvals, the MMIT Index team surveyed a representative sample of payers via one of its monthly Rapid Event Primers. Before we dive into the results and what they mean for manufacturers planning their market access strategy, let’s take a closer look at the various approaches to expedited approval.
Types of expedited approval pathways
As the FDA has a vested interest in helping condition-altering therapies come to market, it offers four separate programs to speed the approval process for new drugs that either treat serious conditions or address unmet medical needs. In the past five years, between 60% and 74% of all novel drugs approved each year were routed through at least one of these expedited pathways.
- Fast track: Manufacturers must apply for this designation, which is intended to speed the development and approval of drugs for unmet treatment areas. Fast-tracking features frequent FDA/manufacturer communication throughout the drug development and review process.
- Breakthrough therapy: If preliminary clinical evidence indicates that a drug for a serious condition may demonstrate substantial improvement over available therapies (based on a clinically significant endpoint), its manufacturer can apply for this designation by the end of Phase II.
- Accelerated approval: This process allows drugs for serious conditions to be approved conditionally, based on a surrogate endpoint rather than multiple endpoints. Manufacturers must then conduct phase IV confirmatory trials to show that the drug provides a clinical benefit before earning final approval.
- Priority review: The FDA categorizes each drug application as either a priority review (about six months) or a standard review (about ten months). Priority review is reserved for drugs that will improve the treatment, diagnosis, or prevention of severe conditions. This designation doesn’t alter the medical standard for approval or the quality of evidence necessary.
Payers’ unfilled need for safety and efficacy data
Although payers rely on various criteria to evaluate newly approved drugs, 90% of surveyed payers report that clinical trial data on safety and efficacy is essential for their review process. Payers are especially interested in the drug’s safety data and its potential impact on costs. If a breakthrough drug shrinks the brain tumors of patients in clinical trials, and receives conditional approval based on that intermediate endpoint, payers will likely to be hesitant to cover it. After all, an intermediate endpoint is merely a predictor of overall clinical outcomes.
Without long-term study data, payers cannot be sure that the drug doesn’t also cause an unexpected comorbidity. Will patients’ equilibrium be affected, causing them to lose the ability to walk? Will payers need to spend money not only on this treatment, but also on other drugs and/or hospitalizations to treat unknown side effects?
Our research indicates that most payers (70%) are at least moderately concerned over the reduction in required clinical trials for many expedited drugs. Many survey respondents expressed concerns about the scarcity and validity of available data. As one Chief Medical Officer/Medical Director noted, “We try to make decisions based on the strength of the clinical evidence. Sometimes, with the fast-track options, the trial data is limited, and it is hard to assess if there is enough info to show that the efficacy/safety results are valid or not.”
Typical utilization restrictions for expedited drugs
Of the surveyed payers, 80% report that they are somewhat or very likely to cover a product with more robust clinical trials rather than a fast-tracked product. Many payers, especially the larger ones, are likely to take a wait-and-see approach for expedited drugs. They may institute a mandatory six-month or twelve-month block on new therapies, which gives the P&T committee more time for data to accumulate before final coverage is determined.
In the absence of long-term data, many payers will choose to cover an expedited drug sparingly. For drugs approved via accelerated pathways using limited clinical data, 50% of surveyed payers say they are most likely to require a medical exception request and review process, while 10% say they are most likely to issue restrictive prior authorizations. Only 40% say they are likely to review the drug just as they would a standard-approval drug.
A majority of payers (60%) say they are also moderately or very concerned about reduced transparency regarding the results of all clinical trials conducted for a particular drug. Some noted that when data is only available through abstract posters, rather than reviewed journals, it’s difficult to assess the full scope of trial data.
Others commented that there should be full disclosure of all of the clinical trials, including their strengths and weaknesses, which were reviewed and which weren’t, and the manufacturer’s rationale for considering some trial data and not others. Reduced transparency “makes it more difficult, for the drug in question, to establish meaningful utilization (PA) criteria if data about inclusion/ exclusion criteria, side effects, or other important study parameters are not available,” said one Pharmacy Director/Clinical Pharmacist.
Developing an effective launch strategy
In light of this information, manufacturers of breakthrough drugs must be aware of the ramifications of expedited approval on their launch trajectory. While some physicians are accustomed to requesting medical exceptions for their patients, for many others, this process is likely to be viewed as too much of an administrative burden—and they will instead prescribe an alternative therapy.
To set realistic expectations for launch, manufacturers of drugs approved via an expedited process should conduct an analog analysis of other fast-tracked therapies. By choosing relevant, analogous market access scenarios, manufacturers can accurately anticipate how payers are likely to respond to their drug at launch. This valuable information can help manufacturers target the right payers and providers, develop a strong physician education program, and adjust their market access strategy to accommodate likely restrictions.
Manufacturers should also keep in mind the breadth and depth of the data payers want. As one Pharmacy Director/Clinical Pharmacist said, payers are interested in “complete transparency on inclusion/exclusion criteria,” as well as “transparency on how subjective endpoints were measured, e.g., as endpoints related to patient-reported outcomes.” Others noted their organization’s desire for full disclosure about failed trials, cost offsets, off-label use, and other indications being tested.
Manufacturers might be able to persuade payers not to require medical exceptions if they provide not only the pivotal trial results that led to the drug’s approval, but also proof that those results can be considered clinically meaningful. Providing a transparent recap of clinical trial data will be met with gratitude from payers who are simply looking to reduce risk when bringing new drugs that were fast-tracked to the P&T committee.
The benefits gained from fast tracking novel drugs are numerous, as long as everyone is aware of the potential risks and is committed to working together to mitigate them. Manufacturers can begin to turn a profit on their new drug, which will allow them to invest in additional research and even more new therapies. Doctors with qualifying patients can save more lives. And most importantly, patients waiting for drugs to be approved so they can begin treatment will be able to access life-saving treatments faster.
To see how MMIT can help you predict uptake of your new expedited-approval therapy, learn more about our Strategic Launch Report & Evaluate Forecast. For more research on payer perspectives, learn about MMIT’s Biologics & Injectables Index.
