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Inside Health Policy – Insurers’ ‘Wait and See’ Stance Worries Makers of Breakthrough Drugs

Inside Health Policy – Insurers’ ‘Wait and See’ Stance Worries Makers of Breakthrough Drugs

Insurance giant Aetna likely will wait and see how CMS treats breakthrough therapies before deciding how to cover the potentially expensive drugs, a company official recently said, playing into drug industry fears that reimbursement of the new breakthrough designated drugs will play an important role in the success of the new pathway and that some payors may not cover the quickly developed medications. Insurers want to make sure they are held to the same standards applied to other drugs, an insurance source said.

FDA drug center chief Janet Woodcock downplayed the concerns, saying breakthrough drugs must meet the same safety and efficacy standard as others and the drugs, while likely to be expensive, are expected to be more effective than existing therapies. But agency officials said they have not yet met with CMS to discuss breakthrough drugs even though the two agencies sometimes meet while drugs are being developed.

Michael Kolodziej, national medical director of oncology solutions at Aetna, said the insurer likely will want to see how breakthrough therapies “play out” before deciding how it will cover these drugs. He said Aetna will watch to see how CMS covers the drugs — as it does for drugs approved via the “traditional pathway” or like medications approved through accelerated approval — and what types of post-approval studies may be necessary.

“We want to see how CMS is going to treat these breakthrough drugs,” Kolodziej told reporters following a discussion of breakthrough therapies hosted by Friends of Cancer Research and Alexandria Center for Life Science. “It is a new pathway to approval and there’s a lot of drugs on the list and if they get approved, I hope they are all very, very effective, I sincerely do, but I happen to know, without a doubt, that they are going to be very, very expensive.”

Kolodziej said payors will need to know how much better these drugs work.He said the company wants to make sure breakthrough drugs are held to the same evidentiary standard that FDA applies to other medications.

Susan Pisano, vice president of communications at America’s Health Insurance Plans, said the group is not aware of plan policies regarding breakthrough drugs per se, “but it is our understanding that a breakthrough drug is still in the process of being evaluated via clinical trials and still is considered experimental.” Further, she said plans decide coverage based on a process that includes reviews of evidence, and published literature and reports.

Woodcock addressed some of the concerns expressed by Kolodziej, echoing sentiments from stakeholders that these drugs will go through the same review process for approval “that any other drug would go through.” An FDA spokeswoman emphasized that breakthrough is a designation, not an approval, and designated drugs will have to go through the regular FDA review process and found to be safe and effective before approval.

“So maybe they will have accelerated approval if they are using a surrogate and maybe they will have regular FDA approval and actually what we would expect for breakthrough therapies that actually deliver their early promise is they will be much better than the drugs we’re using now,” Woodcock said during a panel discussion at the event.

She added that a “fair percentage” of the breakthrough drugs likely will have activities that have not been achieved before with other drugs. Woodcock agreed, however, that these medications — like many other new technologies — will likely be expensive.

“But I don’t see that they are going to be mediocre and expensive, in general, and they certainly won’t have lower approval standards than other drugs,” she said. Other FDA officials reiterated Woodcock’s statements this week and said they did not think reimbursement would be a major issue.

“I can’t imagine that (CMS is) not going to pay for a breakthrough therapy,” said Bob Temple, deputy director for clinical science in FDA’s drug center. “Breakthrough therapy is better than what’s available.”

Other stakeholders also have emphasized that drugs with the breakthrough designation will not be held to lower approval standards. The breakthrough designation was created by last year’s FDA Safety and Innovation Act and is intended to speed up development of treatments for serious or life-threatening diseases that show potential in early clinical trials.

The goal of the designation is to facilitate increased interaction between sponsors and FDA to expedite development programs, not change approval standards, said Jeff Allen, executive director of Friends of Cancer Research, which spearheaded inclusion of the designation in FDASIA. He said he hopes that having that approval standard in place will make sure that those evaluating these therapies after FDA approval will be comfortable with the data that is generated.

Reimbursement of breakthrough therapies is “certainly something important to think about,” said Jonathan Leff, partner at Deerfield Management, who also serves on the boards for the National Venture Capital Association and Biotechnology Industry Organization. But, he said he is not convinced that it is “an issue” for success of the pathway.

If breakthrough therapies live up to their billing, their benefits will be clear and “should be associated with the kinds of evidence payors respond to,” he said.

The issue also came up at a Capitol Hill briefing on breakthrough therapies hosted by FOCR in late July.Jay Siegel, head of global regulatory affairs at Johnson & Johnson, said the success of the breakthrough pathway could ride on market access to the products. He said insurance companies may require cost-benefit analyses based on trials with definitive endpoints and large numbers of patients, which breakthrough drugs may not have.

Siegel said insurers may not deny coverage of the drugs, but may insist that patients try other therapies before being given the breakthrough drug. He noted that lack of reimbursement could create disincentives for companies to invest in these medications.

“That is really going to require some attention: how do you bring payors on board,” he said.

Ellen Sigal, chair and founder of FOCR, noted at the July briefing that better economic data may be needed. She said patients are often treated with the wrong treatments, which can have big economic costs and also be a “huge cost” to patients.