Medicare Spending on Drugs With Accelerated Approval.

Area of Science:

• Health Economics
• Pharmaceutical Policy
• Regulatory Science

Background:

• The U.S. Food and Drug Administration (FDA) grants accelerated approval based on surrogate endpoints.
• Full approval requires confirmatory trials, but some drugs remain on the market without it for extended periods.
• Uncertainty exists regarding clinical benefits until confirmatory trials are completed.

Purpose of the Study:

• To estimate Medicare fee-for-service payments for drugs with accelerated approval that have not yet received full FDA approval.
• To analyze beneficiary out-of-pocket spending and drug characteristics for these medications.

Main Methods:

• A cross-sectional analysis was conducted using fee-for-service Medicare Part B and Part D drug claims from 2019.
• Data included beneficiaries enrolled in Medicare Part B and Part D plans.
• Medicare spending, beneficiary spending, and drug characteristics were examined for accelerated approved indications without full approval.

Main Results:

• In 2019, 45 drugs with 69 accelerated approved indications lacked full FDA approval.
• Medicare fee-for-service spent $1.2 billion on 36 drugs across 55 indications.
• Beneficiaries incurred $209 million in out-of-pocket costs; oncology drugs comprised 82% of indications and 72% of spending.
• Estimated total Medicare spending, including Medicare Advantage, reached $1.8 billion in 2019.

Conclusions:

• Fee-for-service Medicare incurred substantial spending on accelerated approved drugs awaiting full approval in 2019.
• Medicare should implement strategies to incentivize sponsors to expedite confirmatory trial completion.
• Encouraging timely completion of trials is crucial for ensuring drug efficacy and patient safety.