Expanded use of cost recovery “bridge” funding from the federal government could help ensure promising rare disease treatments gain US Food and Drug Administration approval and reach the market before sponsors run out of money and are forced to terminate clinical trials.
The idea was floated during a recent Friends of Cancer Research meeting about cell and gene therapy regulatory and manufacturing challenges. Panelists suggested new ideas may be needed to cover the cost of developing “exceptional” products for small populations before they are approved by the FDA.
Cost recovery for products under development now is limited and governed by statute for public payors. Sponsors can request reimbursement of direct costs for certain products in clinical trials, but not administration or administrative fees, patient travel, etc.
While the “broader rule” makes sense, Holly Fernandez Lynch, of the Perelman School of Medicine at the University of Pennsylvania said, the need for “exceptional approaches for exceptional cases” remains.
“If we are thinking outside the box,” Lynch said, “why not think about novel funding mechanisms that are different from insurance coverage,” like “bridge funding” to get products “developed in this non-commercial model, especially in the context of rare diseases.”
It might be “the responsibility of the government to meet these gaps where the capitalist system and commercial sponsorship is not going to work,” she added. “It is a responsibility of the government to step in in those cases, and there might be novel funding opportunities to do that without relying on insurance payments.”
Model Could Work With ‘Conditional Approval’
The model could dovetail with the “conditional approval” pathway based on a “plausible” mechanism of action that FDA Commissioner Martin Makary floated.
“Our new FDA commissioner is proposing a new pathway for therapeutics that target a molecular abnormality that could occur earlier in the drug development cycle,” said Crystal Mackall, of Stanford University’s Center for Cancer Cell Therapy. “So, there may be a path there.”
Lee Fleisher, former US Centers for Medicare and Medicaid Services chief medical officer now with Rubrum Advising, said the idea is a government source of funding that would cover products under “conditional approval” until a full FDA approval is reached. The system would not “change the payors’ role,” but provide a funding bridge to complete development, he added.
Mackall wondered whether there was an appetite or funding available for the idea, given the recent “gutting” of basic research funding by the Trump Administration. She suggested different private funding, like foundations, may be possible.
Nicole Verdun, director of the Office of Therapeutic Products in the FDA’s Center for Biologics Evaluation and Research, then said that while “there’s a lot of unknown” in terms of what Makary is proposing on conditional approval, several existing programs are available to sponsors.
“We do have a lot of regulatory flexibility … in the rare disease space that we are very much willing to use,” she said.
Questions About “Conditional Approval”
Some were concerned that a “conditional approval” pathway would have negative consequences, no matter whether it includes a cost recovery option.
Rare disease patients “are extremely vulnerable, and lowering that standard to giving a pass to things that really aren’t effective opens the door to a whole host of people who will market drugs that don’t work for these children,” Mackall said.
“It distracts and it takes up precious time, and they don’t get the drug that works,” she said. “So I really am a firm believer we need FDA approval.”