Reforming Reimbursement for the US Food and Drug Administration’s Accelerated Approval Program to Support State Medicaid Programs

Abstract

ImportanceThe US Food and Drug Administration (FDA) has an accelerated approval program that has become the subject of scholarly attention and criticism, not only for the FDA’s oversight of the program but also for its implications for payers.ObservationsState Medicaid programs’ legal obligations to provide reimbursement for accelerated approval products have created fiscal challenges for Medicaid that have been exacerbated by industry’s changing use of the accelerated approval program over time. Although strategies for accelerated approval reforms have been proposed, most focus on reforming the FDA’s accelerated approval pathway and product regulation without taking into account the implications of this pathway for state Medicaid programs. There is a need for policy reforms that balance the goal of speeding approval of important medicines with states’ real concerns regarding spending on medications with little evidence of clinical benefits. Areas of potential reform include formulary exclusion, Medicaid rebates, value-based pricing, and consolidated purchasing or carve outs.Conclusions and RelevancePolicy makers may wish to consider options for reforming reimbursement for accelerated approval products in addition to reforms to the FDA’s operation of the pathway. Policy reform proposals can provide a range of options to evaluate trade-offs of access and pricing.