Accelerated Approval—An Unexpected Pathway To Value-Based Pricing?

Accelerated approval is an important regulatory pathway that provides early access to treatments for patients with serious and life-threatening conditions. It is granted based on substantial evidence that a surrogate or intermediate endpoint is “reasonably likely to predict clinical benefit” using a totality of evidence. This pathway has recently entered the spotlight because of several key regulatory events: the Food and Drug Administration’s (FDA’s) approval of the controversial Alzheimer’s treatment, aducanumab; the voluntary withdrawal or planned withdrawal of anticancer drug indications from four drugs that failed to demonstrate a survival benefit in confirmatory trials; and an Oncologic Drug Advisory Committee meeting that reviewed six additional anticancer indications whose trials did not confirm benefits but were still on the products’ labels. These events have raised important questions about the value of products granted accelerated approval—and about the regulatory pathway more broadly.

The heightened scrutiny on accelerated approvals centers on the uncertainty of the benefit of these products and the prices that these products can command. Here we discuss opportunities to improve the accelerated approval program and how might we re-think coverage and reimbursement for products with unclear benefit.     

Challenges With The Accelerated Approval Pathway

Accelerated approval is frequently used when the clinical outcomes of interest for a medical product require extended follow-up time or are rare. Although sponsors must meet the same standard as traditional approval—the “substantial evidence” bar—they may rely on surrogate endpoints that predict the clinical benefit rather than measuring the clinical benefit directly. For example, tumor size and viral load are used as surrogates for survival in oncology and HIV, respectively. These are used rather than direct measures, including patient survival time.

Regulatory decision making is complex, requiring knowledge about the disease context and synthesis of data from multiple disciplines to assess the benefits and the risk of a medical product. Using a surrogate endpoint—or multiple surrogates—adds an additional layer of regulatory complexity. The FDA states, “the acceptability of these surrogate endpoints for use in a particular drug or biologic development program will be determined on a case-by-case basis.” Disagreement within and across disciplines within the FDA or their advisory committee members is expected and, in fact, a welcome aspect of the drug development process, particularly in areas of uncertainty. Ultimately, accelerated approval requires agreement on markers of a product’s benefit, which will be evaluated following the product’s launch. Despite recent, high-profile exceptions, the accelerated approval program has worked reasonably well to expand access to products, many of which are ultimately shown to confer clinically meaningful benefits to patients. However, there are several key areas in need of reform.

Under the statutory terms of accelerated approval, sponsors are required to complete post-market, confirmatory studies either using an endpoint that measures the clinical benefit of interest or assessing the surrogate over a longer time frame. In some cases, these benefits are confirmed; in others they are not. The lack of confirmed benefit is not a failure of the accelerated approval pathway. Instead, this outcome should be expected given the uncertain link between surrogate outcomes and clinical outcomes that defines the use of the accelerated approval pathway. While many products complete their confirmatory studies in a reasonable time frame, manufacturers currently have limited incentives to do so. Furthermore, there are instances where the confirmatory evidence did not support the preliminary benefit evaluation, but these products continued to have marketing authorization (that is, dangling approval). The timely completion of confirmatory studies by manufacturers and continued use of accelerated approval drugs after products fail to meet their endpoints in completed confirmatory trials are important areas for policy intervention.    

Pricing, Payment, And Value

Given the serious nature of the conditions these drugs treat, along with the lack of alternative treatment options available, accelerated approval products aim to fill a gap in treatment access for patients. In the meantime, sponsors work to generate evidence to inform a full approval decision. However, the uncertainty of benefit at the time of accelerated approval may result in substantial spending on products that are ultimately proven ineffective. Today, manufacturers price these products as high as the market will bear, despite the limited evidence underlying their approvals and the need for ongoing data collection to confirm clinical benefits.

Aducanumab’s approval provides an excellent example for the need to establish a value-based price for drugs approved under this pathway. The exorbitant pricing of aducanumab in the context of the uncertainty of its approval and its implication on care has triggered investigations by two House committees and the Department of Health and Human Services’ Advisory Council on Alzheimer’s Research, Care, and Services. The sponsor priced aducanumab at $56,000 per year despite the product being approved using a surrogate endpoint through the accelerated approval pathway. An independent assessment conducted by the Institute for Clinical and Economic Review (ICER) suggested the price for a hypothetical therapy that halted the progression of dementia could range from $50,000 to $70,000 per year and still meet commonly cited cost-effectiveness thresholds. In contrast, based on the evidence of effectiveness available today, the ICER estimated that aducanumab should be priced between $3,000 and $8,400 per year for patients with early Alzheimer’s disease to be deemed cost-effective.

Further complicating the pricing and payment of accelerated approvals is that they are not product based, but rather indication based. As a result, a single product may have one or more accelerated approvals and may concurrently have traditional approvals for distinct indications. For example, nivolumab, an immunotherapy used to treat multiple types of cancer, currently has 12 indications of which four are through accelerated approvals. Setting a (high) single price across these different indications—regardless of the certainty of benefit—does not appropriately reflect the value of those distinct indications. Uniform pricing for an accelerated approval indication regardless of value is particularly a problem in resource-constrained government programs including Medicaid in which all FDA-approved outpatient products participating in the rebate program must be covered or Medicare in which oncology products that are reasonable and necessary must be covered. 

Seven Recommendations To Improve The Accelerated Approval Program

The accelerated approval program needs reform. This includes improving transparency in the process by which confirmatory trial endpoints are selected, enforcing the timely completion of confirmatory studies and addressing pricing for products for which clinical benefits are not clearly established. Building on prior recommendations, we recommend the following seven steps to improve the accelerated approval program. The first three are focused on regulatory reform. The next four address pricing and payment reform. Together, these reforms would help ensure that the goals of increasing access to drugs for patients who have limited treatment options are balanced with protecting patients and taxpayers from overpaying for treatments that may have limited or no benefit. Moreover, we believe they show how the accelerated approval program may provide an unexpected pathway to value-based pricing.     

Develop And Implement A Publicly Available Framework For Identifying And Validating Surrogate Endpoints

This framework could facilitate greater efficiency in drug development and provide transparency and credibility on how and why the FDA agreed on the use of selected surrogates. For example, reviewers could detail the justification for the relationship of a selected surrogate endpoint with the clinical outcome of interest using the questions listed in the “Considerations for Discussion of a New Surrogate Endpoints at a Type C PDUFA Meeting” document.

Mandate Reasonable Time Frames For Generating Confirmatory Evidence

In addition to mandating such time frames, regulators should develop a standard process for reviewing and making decisions on confirmatory evidence to prevent “dangling approvals.” Creating such a structured process could remove the uncertainties of when and what decisions need to be made as well as perception and transparency challenges from external stakeholders.

Create A Process For Accelerated Approval Revocations

Such a process—critical for those cases where confirmatory evidence does not demonstrate benefit—should also minimize harm to patients and mitigate concerns of disrupting patient care. Specifying access for products for which multiple accelerated and non-accelerated indications have been granted will be particularly important to ensure that these drugs remain accessible to patients with indications for which benefits are known or confirmed.

Price Accelerated Approval Products To Reflect The Drug’s Value At The Time Of Approval

This approach would ensure that patients and taxpayers do not overpay for products for which the evidence base has not yet been fully developed. To inform value-based pricing, cost-effectiveness evaluations could establish a recommended price based on evidence available at the time of approval. These analyses could use generous thresholds for evaluating benefit, including considering surrogate endpoints as translating directly to clinical benefit when considering a value-based price. All accelerated approval products should be subject to pricing review and the value-based price would be available to public payers until confirmatory trials are complete and clinical benefits are confirmed. Products whose clinical benefits are not confirmed could be subject to price adjustments, in cases in which these products remain on the market.

Use Indication-Based Pricing

Indication-based pricing is an especially ripe mechanism for a product with both traditional and accelerated approvals. The flexibility would allow fully approved products to be fully valued while accelerated approval products, whose benefits are yet unclear, would not be paid for at the same value.

Link Reimbursement To Confirmatory Evidence 

To incentivize rapid confirmatory evidence generation, payers should limit reimbursement for products whose confirmatory trials are delayed. For example, Medicaid could adopt policies that increase the rebate for products that have yet to complete confirmatory trials and penalize sponsors with an inflationary rebate for not fulfilling confirmatory trials in a pre-set time frame. Upon confirmation of the benefit, payers would pay the full price of the product (or eliminate the rebate). If the confirmatory evidence does not support the accelerated approval’s benefit and the product remains on the market, the price of that indication could be further reduced (or receive a larger rebate).

Implement Value-Based Payment Arrangements

Tying coverage, payment, or reimbursement to (non-surrogate) outcomes can help implement the infrastructure necessary to generate complementary real-world evidence while limiting the financial risk of using products with uncertain benefit. Sponsors could include the real-world evidence generated as part of the value-based payment arrangements in the evidence package along with the evidence generated from the clinical trials to provide confirmatory evidence using a totality of evidence approach. Payers and providers could use the same real-world evidence to identify differences in outcomes to prioritize subpopulations. Furthermore, researchers could generate hypotheses for future clinical trials. 

An Opportunity

The accelerated approval pathways provide patients with serious and life-threatening conditions earlier access to innovative medical products than under traditional approval pathways. However, there are inherent risks in approving drugs based on surrogate outcomes, including that patients and the public will overpay for products that ultimately have little or no value. We highlight several areas in need of reform to better support the goals of this important regulatory pathway, including both regulatory and payment reform. These proposed changes could better align incentives for drug manufacturers to ensure timely completion of confirmatory trials and could be an opportunity to engage in value-based pricing and payment in an area of potential high costs and high uncertainty of benefit.

Authors’ Note

Dr. Dusetzina reports grants from Arnold Ventures, the Commonwealth Fund, the Leukemia and Lymphoma Society, and the Robert Wood Johnson Foundation. She also receives honoraria from West Health and the Institute for Clinical and Economic Review. Dr. Dusetzina serves on the Medicare Payment Advisory Commission. Nirosha Mahendraratnam Lederer is an employee at Aetion Inc. The views presented are those of the authors and do not reflect those of the Commission.