Accelerated Approvals: Formulary Challenges and Payer Impact

A historic 49 drug approvals came through the accelerated approval pathway in 2020, and the trend only continues to grow.

In 1992, the U.S. Food & Drug Administration (FDA) instituted its accelerated approval program to allow for earlier approval of drugs that treat serious conditions.1 Through the traditional FDA approval process, at a minimum, two phase 3 clinical trials are required prior to approval to demonstrate full efficacy and safety.2 The traditional pathway leads to a full approval.2

Yuqian Liu, Pharm.D. Senior Director, Specialty Clinical Solutions Magellan Rx Management

In comparison, the objective of the accelerated approval pathway is to fill an unmet medical need based on a surrogate endpoint or an intermediate clinical endpoint.2 Some surrogate endpoints include laboratory measurements, radiographic images, and physical signs. An intermediate clinical endpoint is a measure of a therapeutic effect that is considered reasonably likely to predict the clinical benefit.1 Through accelerated approval, the use of a surrogate endpoint can considerably shorten the time required prior to receiving FDA approval.1

Conditional approval is granted under the accelerated approval pathway, which means if the confirmation trial fails to demonstrate actual clinical benefit, the drug or the approved indication may be withdrawn from the market.1

There has been a significant increase in the number of accelerated approvals since the pathway was first introduced. In 2020, a historic 49 drug approvals passed through the accelerated approval pathway, and this trend continues to grow.1

The accelerated approval pathway offers advantages, including earlier access to drugs, particularly in spaces with unmet needs.3 There are also strong data to support continuity of these accelerated approval products; 76.5% of drugs approved via the accelerated pathway receive full approval.3

Pharm.D.,

Director, Clinical Strategy and Innovation, Oncology Magellan Rx Management

Despite the benefits, the accelerated approval pathway does introduce challenges, particularly in managed care evaluation of these products.4 There is limited clinical data available at the time of approval due to smaller studies and lack of long-term data. It is important to note that surrogate markers only serve as predictors and do not exemplify actual clinical benefit. These limitations can pose challenges to evaluating products and developing management strategies.

Impact on Formulary Review Process

The data available for accelerated approval drugs are limited due to smaller size and some earlier stage clinical trials; therefore, it is harder to extrapolate the data to larger populations.4 For some products that are initially approved based on single-arm trials, especially in oncology and rare disease spaces, it is harder to compare against already available options.4 Notably, many accelerated approval products are the first treatment option for a disease; however, even in these cases, it is challenging for managed care professionals to evaluate the value and appropriateness of a new therapy against the current standard of care.4

As previously stated, surrogate endpoints as predictors for clinical benefits are not measures of clinical benefits.4 Therefore, it is difficult for a managed care pharmacist to assess the real-world applicability of these metrics and predict the true clinical benefits of the drug. Surrogate endpoints do not provide data for long-term clinical benefit.4 In the formulary review process, cost-effectiveness modeling is becoming increasingly utilized; however, it requires accurate long-term clinical benefit information to provide value.4 With only surrogate endpoints for accelerated approval drugs, managed care organizations will not be able to strategize using cost-effectiveness modeling.4

Particularly for rare diseases, the cost of accelerated approval drugs can be high.4 Data show that after 15 years on the market, on average, a drug that won FDA accelerated approval had 15.4 times price increases compared with 12.7 times for other drugs approved via traditional pathways.4

Additionally, products that receive accelerated approval are required to confirm clinical benefits via phase 3 clinical trials.4 However, the timeline for this confirmation may vary significantly based on the disease state. The FDA does not mandate a specific deadline by or timeframe within which the trials must completed. Data show that 13% of accelerated approvals have been on the market for a median of 9.5 years without confirmatory evidence, which is a substantial period of time without having confirmation of actual clinical benefit. Aside from the 4% that were approved more recently, 54% of the accelerated approval drugs started confirmatory trials within the first year on the market, with the remaining 42% having started after at least one year on the market.5

Another challenge is managing market withdrawal. As the number of accelerated approvals increases, the number of withdrawals has followed a similar trend. From 1992 to 2001, there were six withdrawals.6 This number increased to 12 withdrawals from 2002 to 2011. From 2012 to 2021, another 14 drugs were withdrawn.6 As the number of withdrawals increases, however, the length of time to withdrawal has shortened.6 The average time to withdrawal between 2012 and 2021 was 3.7 years with a median of 3.5 years, compared to an average of 8.9 years and a median of 10.4 years between 1992 and 2001.6 For payers, the challenge lies in the cost associated with these market withdrawals.6 The cost burden increases along with the number of approvals.6

In 2014, the U.S. Centers for Medicare & Medicaid Services (CMS) issued a National Coverage Determination (NCD) with guidelines for coverage of these products in the Medicare population.7, 8 When this NCD is invoked, CMS will only cover an accelerated approval product when it is given as part of a CMS-approved study or National Institute of Health (NIH)-supported trial.7, 8 With the approvals of products used to treat Alzheimer’s disease, CMS issued an NCD to clarify CMS coverage of these products, referring payers to the original NCD from 2014.7, 8 For the Medicaid population, there are some state-specific requirements surrounding accelerated approval drugs.7, 8 For commercial and exchange populations, formulary and management strategy is dependent on the approach of individual payers.7, 8

2022 Orphan Drugs with Accelerated Approval14

Impact on Disease Spaces

Rare Diseases

A rare disease is any disease or condition that either affects fewer than 200,000 people in the U.S. or for which there is no reasonable expectation that the cost of development and making a drug available in the U.S. will be recovered from sales in the U.S.9 Rare diseases represent about 370 diseases affecting 8.4 million patients, of which more than 50% are children.10

The Orphan Drug Act of 1983 provided financial incentives to attract industry interest through a seven-year period of market exclusivity for a drug approved to treat a rare, or orphan, disease, even if it were not under patent, and tax credits up to 50% for research and development expenses.11 Through the Act, the FDA was authorized to designate drugs and biologics for orphan status, provide grants for orphan drug testing, and offer assistance for framing study protocols.11 Orphan drug designation was provided to drugs used to treat, prevent, or diagnose an orphan disease. Orphan drugs may be approved through expedited FDA programs, including the accelerated approval pathway and phase 2 trials that may be used as pivotal trials.12 The top priorities for therapeutic development are metabolic, hematologic, immunologic, congenital, and neurologic disorders.10 pacritinib (VONJO™) adults with intermediate or high-risk primary or secondary (post-polycythemia vera or post-essential thrombocythemia) myelofibrosis with a platelet count below 50 x 109/L alpelisib (VIJOICE®) treatment of PIK3CA-related overgrowth spectrum in adults and pediatric patients tisagenlecleucel (KYMRIAH®) relapsed or refractory follicular lymphoma; CAR T-cell futibatinib (LYTGOBI®) cholangiocarcinoma with FGFR2 mutation selpercatinib (Retevmo™) tissue agnostic RET fusion solid tumors, RET fusion positive NSCLC teclistamab-cqyv (TECVAYLI™) relapsed or refractory multiple myeloma elivaldogene autotemcel (SKYSONA®) cerebral adrenoleukodystrophy (CALD) in boys ages 4-17 mirvetuximab soravtansinegynx (Elahere™) ovarian cancer mosunetuzumab-axgb (LUNSUMIO™) relapsed or refractory follicular lymphoma in adults adagrasib (KRAZATI®) KRAS G12C mutation NSCLC in adults

Abbreviations: CAR T-cell = chimeric antigen receptor T-cell; FGFR2 = fibroblast growth factor receptor 2; KRAS G12C = Kirsten rat sarcoma, glycine 12 to cysteine; NSCLC = non-small cell lung cancer; PIK3CA = phosphatidylinositol-4, 5-bisphosphate 3-kinase catalytic subunit alpha; RET = rearranged during transfection

Rare diseases come with significant healthcare costs. The total cost estimate to treat 24 rare diseases is $125 billion.10 Per patient, per year costs for rare diseases range from $121,000 to $334,000 with an average cost of $266,000.10 The annual estimated overall costs to treat rare diseases in the U.S. is $2.2 trillion for an affected population of 8.4 million.10

Recently, the number of drugs for rare diseases approved under the accelerated approval program, including gene therapies, has increased.13 Due to the use of surrogate markers and small populations studied, payers face challenges in determining the true clinical value of these products, making it difficult to design coverage criteria.13 Additionally, medications with accelerated approval are now direct competitors for drugs with phase 3 clinical trial data.13 It is difficult to determine real-world outcomes and clinical value of therapy post-launch due to the small population of individuals with the rare diseases of interest.13

Oncology

The most commonly used surrogate endpoint to support accelerated approvals is objective response rate (ORR).15 Response Evaluation Criteria in Solid Tumors (RECIST) are criteria developed by the World Health Organization (WHO) to measure tumor response to therapy.15, 16 RECIST criteria were published by the WHO in 1979 to define objective response and were used until 2000.15, 16 The criteria are based on the visual assessment of tumor size in morphological images provided by computed tomography or magnetic resonance imaging.15, 16

After the introduction of molecularly targeted treatment with biologic agents, routine use of a fluorodeoxyglucose-positron emission tomography scan, and advanced MRI techniques as functional imaging ushered in the need for new perspectives in response evaluation.15, 16 New criteria are being developed to better quantify responses based on cancer type and therapy used to treat.15, 16 Specifically, immunotherapy by checkpoint inhibitors, due to differences in response patterns and progression when compared to chemotherapy and targeted agents, has led to the development of more response criteria distinctive to the tumor or therapy used to treat.15, 16

Accelerated approvals offer some benefits in the oncology space.2 Specifically, oncology products that show initial evidence for safety and effectiveness are available an average of 4.7 years faster.2 Some cancers for which accelerated approval products eventually received standard approval include metastatic breast cancer, Philadelphia chromosome positive chronic myeloid leukemia in chronic phase, metastatic non-small cell lung cancer, and metastatic urothelial cancer.2 As of March 2023, there have been 180 accelerated approvals in the oncology space.1 Of these, 89 demonstrated actual clinical benefit through post-marketing trials, 69 are pending post-marketing trial verification, and 22 had indication or market withdrawals.1

Beginning in 2011, the FDA began the withdrawal of accelerated approvals, with the average time from approval to withdrawal being 5.5 years.1 More recently, as more drugs are approved through the accelerated approval pathway, the time to withdrawal has decreased and the number of withdrawals has increased.1 Notably, by 2022, all 22 withdrawn accelerated approvals were for cancer products due to safety concerns of failure to meet confirmatory endpoints.1 Withdrawn drugs or indications can have a clinical and financial impact on patients and payers. Notably, patient subgroups who benefitted from the therapy may potentially have no access to efficacious treatment and may be required to transition to treatment that may not offer equally efficacious outcomes. Among patient groups who did not benefit from the therapy, there may be disease progression or greater toxicity as well as financial consequence due to expenses, both direct and indirect.

One example is intravenous olaratumab, which received accelerated approval in late 2016 and was withdrawn when the confirmatory trial did not show survival benefit in the approved indication after 2.5 years.4 The drug cost $106,100 for six months of treatment, and in 2018, it generated $305 million in sales.4

Alzheimer’s Disease

Alzheimer’s disease (AD), a progressive, neurodegenerative brain disease, is the sixth-leading cause of death among Americans.17, 18 It is estimated that only 50% of patients with AD have been diagnosed and with a rapidly aging population, AD cases are expected to reach 13.8 million by 2060.17, 18

Two newly approved drugs for AD were approved through the accelerated approval pathway: aducanumab-avwa ( ADUHELM ®) in 2021 and lecanemab-irmb ( LEQEMBI ®) in 2023. 19, 20 For both therapies, there is no safety or effectiveness if started in earlier or later stages than was examined in the studies. Additional studies demonstrating clinical efficacy of patient outcomes and cost-effectiveness will be integral to determine the place in AD management for both of these agents.

The Institute for Clinical and Economic Review (ICER) concluded the suggested cost-effective annual list price range from $8,500 to $20,600; both aducanumab and lecanemab are priced above the ICER range.17 The 2022 CMS NCD policy of aducanumab and any future FDA-approved monoclonal anti-amyloid antibodies, restricts coverage to patients enrolled in CMS-approved or National Institute of Health-supported clinical trials.17 This determination was based on the requirement of clinical trial data to demonstrate clinically meaningful improvement in health outcomes secondary to anti-amyloid monoclonal antibodies.17 Utilization and uptake of lecanemab are expected to be low until CMS modifies the NCD, which currently limits use to the clinical trial population. This is not expected to be modified until late 2023 at the earliest.

Takeaways

Accelerated approval may become a target when states have budget windfalls. As a result of the COVID-19 pandemic-related state budget shortfalls, efforts to cut Medicaid spending have increased.21 The National Governors Association advised that Medicaid coverage of “selected fast-tracked, first-in-class drugs,” like those approved through the FDA’s accelerated approval pathway, are opportunities for cuts.21 For example, Massachusetts and Tennessee have requested federal waivers from Medicaid coverage requirements to curtail patient access to these medicines.21 Patient and provider concerns regarding limitations to access to treatment for the Medicaid population have heightened, especially for those living with serious or lifethreatening, often rare, conditions without treatment options — the population for whom the accelerated approval pathway was developed. States are seeking savings through these proposed restrictions.21 However, an analysis of Medicaid spending on accelerated approval drugs between 2007 and 2018 and their impact on the growth in Medicaid spending revealed that drugs approved under the accelerated approval consistently accounted for less than 1% of annual Medicaid spending.21 These data for the Medicaid population support continued access to accelerated approval drugs for the seriously ill.21

Despite some concerns and challenges, the director of the Center for Biologics Evaluation and Research at the FDA, Peter Marks, indicated in May 2023 a willingness to use the accelerated approval pathway for cell and gene therapies.22 Noting that confirmatory data will be required at some point, Marks discussed the willingness to use regulatory flexibility, particularly when dealing with very small populations.22 He specifically noted that there is more willingness to use the pathway because of new teeth granted by Congress last year, which allow the agency to require confirmatory trials well in progress as accelerated approval is granted.22

Determining the value of emerging novel therapeutics by payers will require clinical trial end points that demonstrate improved survival or quality of life. The continued requirement for confirmatory trials and evidence will be key to ensuring payers allow appropriate access to therapies with clinical benefit while avoiding costs where patients will not benefit.

References

1. “Accelerated approval Program.” U.S. Food & Drug Administration, 30 May 2023, https://www.fda.gov/drugs/nda-and-bla-approvals/ accelerated-approval-program.

2. Ribeiro, Tatiane B., et al. “Comparison of FDA accelerated vs regular pathway approvals for lung cancer treatments between 2006 and 2018.” PLOS One, 2020, https://www.ncbi.nlm.nih.gov/pmc/articles/ PMC7380631/.

3. Johnson, J.R., et al. “Accelerated approval of oncology products: the food and drug administration experience.” Journal of the National Cancer Institute, 20 Apr. 2011, https://pubmed.ncbi.nlm.nih. gov/21422403/.

4. Kaltenboeck, Anna, et al. “Strengthening the Accelerated approval Pathway: An Analysis of Potential Policy Reforms and Their Impact on Uncertainty, Access, Innovation, and Cost.” Institute for Clinical and Economic Review, 26 Apr. 2021, https://icer.org/wp-content/ uploads/2021/04/Strengthening-the-Accelerated-ApprovalPathway-_-ICER-White-Paper-_-April-2021.pdf.

5. Lupkin, Sydney. “Drugmakers are slow to prove medicines that got a fast track to market really work.” National Public Radio, 22 Jul. 2022, https://www.npr.org/sections/healthshots/2022/07/22/1110830985/drugmakers-are-slow-to-provemedicines-that-got-a-fast-track-to-market-really-wo.

6. Beakes-Read, Ginny, et al. “Analysis of FDA’s Accelerated approval Program Performance December 1992-December 2021.” Therapeutic Innovation and Regulatory Science, Sep. 2022, https:// pubmed.ncbi.nlm.nih.gov/35900722/.

7. “Monoclonal Antibodies Directed Against Amyloid for the Treatment of Alzheimer’s Disease.” U.S. Centers for Medicare & Medicaid Services, 7 Apr. 2022, https://www.cms.gov/ medicare-coverage-database/view/ncacal-decision-memo. aspx?proposed=N&ncaid=305.

8. “Guidance for the Public, Industry, and CMS Staff: Coverage with Evidence Development.” U.S. Centers for Medicare & Medicaid Services, 20 Nov. 2014, https://www.cms.gov/medicare-coveragedatabase/view/medicare-coverage-document.aspx?MCDId=27.

9. “Orphan Drug Act - Relevant Excerpts.” U.S. Food & Drug Administration, Aug. 2013, https://www.fda.gov/industry/ designating-orphan-product-drugs-and-biological-products/ orphan-drug-act-relevant-excerpts.

10. Andreu, Pedro, et al. “The burden of rare diseases: an economic evaluation.” Chiesi Global Rare Diseases, 2022, https:// chiesirarediseases.com/assets/pdf/chiesiglobalrarediseases. whitepaper-feb.-2022_production-proof.pdf.

11. Swann, John. “The Story Behind the Orphan Drug Act.” U.S. Food & Drug Administration, 23 Feb. 2018, https://www.fda.gov/industry/ fdas-rare-disease-day/story-behind-orphan-drug-act.

12. Fan, Min, et al. “Postmarketing safety of orphan drugs: a longitudinal analysis of the US Food and Drug Administration database between 1999 and 2018.” Orphanet Journal of Rare Diseases, 4 Jan. 2022, https://ojrd.biomedcentral.com/articles/10.1186/s13023-02102166-9.

13. Hertler, Andrew. “Accelerated drug approvals present a mounting challenge to oncologists and raises concerns about cost effectiveness for health system finance leaders.” Healthcare Financial Management Association, 7 Jan. 2022, https://www.hfma. org/cost-effectiveness-of-health/accelerated-drug-approvalspresent-a-mounting-challenge-to-oncol/.

14. “Orphan Drug Designations and Approvals.” U.S. Food & Drug Administration, 2023, https://www.accessdata.fda.gov/scripts/ opdlisting/oopd/index.cfm.

15. Aykan, Nuri Faruk, et al. “Objective response rate assessment in oncology: Current situation and future expectations.” World Journal of Clinical Oncology, 24 Feb. 2020, https://www.ncbi.nlm.nih.gov/ pmc/articles/PMC7046919/.

16. Gyawali, Bishal, et al. “Assessment of the Clinical Benefit of Cancer Drugs Receiving Accelerated approval.” Journal of the American Medical Association Internal Medicine, 28 May 2019, https://jamanetwork.com/journals/jamainternalmedicine/ fullarticle/2733561.

17. Skaria, Anita Pothen. “The Economic and Societal Burden of Alzheimer Disease: Managed Care Considerations.” American Journal of Managed Care, 12 Sep. 2022, https://www.ajmc.com/ view/the-economic-and-societal-burden-of-alzheimer-diseasemanaged-care-considerations.

18. “Alzheimer’s Disease and Healthy Aging.” Centers for Disease Control and Prevention, accessed 23 Jan. 2023, https://www.cdc.gov/aging/ aginginfo/alzheimers.htm.

19. “FDA Grants Accelerated approval for Alzheimer’s Drug.” U.S. Food & Drug Administration, 7 Jun. 2021, https://www.fda.gov/newsevents/press-announcements/fda-grants-accelerated-approvalalzheimers-drug.

20. “FDA Grants Accelerated approval for Alzheimer’s Drug.” U.S. Food & Drug Administration, 6 Jan. 2023, https://www.fda.gov/news-events/ press-announcements/fda-grants-accelerated-approval-alzheimersdisease-treatment.

21. Thorpe, Kenneth E., and Douglas Holtz-Eakin. “Limiting Medicaid Access to Accelerated approval Drugs: Costs and Consequences.” American Journal of Managed Care, 30 Mar. 2021, https://www.ajmc. com/view/limiting-medicaid-access-to-accelerated-approval-drugscosts-and-consequences.

22. Fiore, Kristina. “FDA ‘Leans In’ to Accelerated approval for Rare Disease Drugs.” MedPageToday, 19 May 2023, https://www. medpagetoday.com/special-reports/exclusives/104594.