Medicare Spending on Drugs With Accelerated Approval

Abstract

Background: The U.S. Food and Drug Administration provides accelerated approval to drugs on the basis of surrogate end points deemed to be "reasonably likely" to predict clinical benefit. To receive full approval, drugs must complete a confirmatory trial. Although most accelerated approved drugs ultimately receive full approval, others remain on the market without full approval for many years, and some are withdrawn before full approval is granted. Until confirmatory trials are completed and full approval is granted, there is uncertainty surrounding each drug's clinical benefits.

Objective: To estimate fee-for-service Medicare payments on accelerated approved drugs without full approvals.

Design: Cross-sectional analysis.

Setting: Fee-for-service Medicare Part B and Part D drug claims in 2019.

Participants: Beneficiaries enrolled in Medicare Part B and Part D plans.

Measurements: Medicare spending for drugs treating accelerated approved indications without full approval, beneficiary spending, and drug characteristics.

Results: In 2019, 45 drugs associated with 69 accelerated approved indications lacked full approval. Of those, the fee-for-service Medicare program spent $1.2 billion on 36 drugs across 55 indications. Medicare beneficiaries had $209 million in out-of-pocket spending on these drugs. Oncology drugs represented 82% of these indications and 72% of the Medicare spending. Extrapolating to Medicare Advantage, total Medicare spending on these drugs in 2019 was $1.8 billion.

Limitations: The study drugs may have clinical benefit and may come to receive full approval after this analysis. The algorithm used to identify accelerated approved indications is novel. Generalizability to other years is unclear.

Conclusion: In 2019, fee-for-service Medicare spent $1.2 billion on accelerated approved drugs without full approval. Medicare should adjust incentives to encourage sponsors to complete confirmatory trials as soon as possible.

Primary funding source: Laura and John Arnold Foundation.