Americans Paying Billions for Drugs That Don’t Work

Created in 1992 in response to the AIDs crisis, the Food and Drug Administration (FDA) accelerated approval pathway is intended for drugs that address unmet medical needs. These drugs often have a previously unseen benefit or target a disease with few or no available treatments.

For a growing number of drugs, however, FDA approval comes with lingering uncertainty of their benefit. Under the accelerated approval pathway, the FDA approves drugs on a provisional basis using surrogate endpoints such as laboratory or imaging results that are proxies for disease progression. Manufacturers are required to conduct clinical trials following approval to confirm clinical benefit. The arrangement is intended to speed access to promising treatments. The FDA expects that manufacturers will confirm that the drugs improve how patients feel, function, or survive.

But manufacturers do not always follow through with the clinical trials. In fact, nearly half of the drugs granted accelerated approval have not been confirmed to be clinically beneficial. In some cases, drugs without evidence of clinical benefit can remain on the market for years.

Accelerated pathway poses unnecessary health risks

Recent research published in JAMA Health Forum examined how much the Centers for Medicare and Medicaid Services (CMS) spent on drugs winning approval via the FDA’s accelerated pathway. Researchers found that the US often pays billions for drugs that either fail to prove their worth later or fail to confirm their accelerated approvals with trials evaluating clinical outcomes.

The study includes the following findings:

• From 2012 through 2017, the FDA granted accelerated approval to 38 drugs for 42 indications, and through 2020, CMS spent $67.9 billion for these treatments.
• For 22 drugs (58%) that converted from the accelerated approval to standard approval based on confirmatory clinical trial results, CMS annual spending also increased substantially after conversion — $35.0 million vs $199.0 million.
• Only six conversions (27%) of the 22 in total were supported by confirmatory trials evaluating clinical outcomes as primary endpoints. Drugs evaluated using surrogate endpoints accounted for $40.3 billion (59%) of CMS spending.
• For the 15 unconverted drugs for which spending data were available, median (IQR) time on market was 55 (47-77) months through 2020, the researchers said. Total CMS spending was $5.8 billion, with 3 unconverted drugs grossing $1 billion or more through

Some drugs that receive accelerated approval can pose serious risks. For example, the lymphoma drug Duvelisib carries multiple black box warnings, including potentially fatal infections in nearly one-third of patients. Nevertheless, the potentially deadly medication was granted accelerated approval based on the assumption that the benefits would outweigh any risks. But shockingly, the manufacturer never started the required trial to confirm Duvelisib’s predicted benefits for two years before the FDA revoked its approval.

Another lymphoma drug, Romidepsin, lingered on the market for ten years after its accelerated approval and more than a year after its confirmation trial failed to show any benefit.

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The unusual path of Aduhelm

Payer discomfort with accelerated approvals exploded into the public arena with the Medicare national coverage determination on Aduhelm and similar drugs, and developers worry that the fallout will be far reaching.

Commercial payers have been complaining for years that new drugs are being approved by the US Food and Drug Administration with less efficacy information than previously required. Now CMS has brought that point of view to the public’s attention in a big way, with a high-profile Medicare coverage policy that has dramatically impacted the commercial future of Alzheimers’s drug Aduhelm, as well as several other drugs in development.

Released on April 7, 2022, the final National Coverage Determination (NCD) imposes coverage with evidence development (CED)) requirements on all amyloid-directed monoclonal antibodies for Alzheimer’s disease. The determination aims to establish a “nimble” system to allow for broad and rapid access to Alzheimer’s disease following traditional approaches while taking a more restrictive approach for accelerated approvals. In effect, the decision means that only patients who have enrolled in clinical trials will be eligible for coverage for Aduhelm.

Drug developers and patient advocates believe CMS has thrown down the gauntlet on accelerated approvals, especially for drugs targeting conditions that do not yet have established treatment pathways. At the same time, CMS officials insist the Medicare national coverage determination for Alzheimer’s drugs will not set a new precedent. After all, CMS has covered quite a few drugs for diseases such as HIV and cancer that have received accelerated approvals to date.

One of the issues with Aduhelm is that the research has so far been contradictory. Two Phase III trials were stopped early after an independent committee appointed by the drug’s manufacturer (Biogen) analyzed the preliminary data and concluded that the studies were unlikely to suggest the drug worked. After the disappointing results of that analysis, Biogen announced that it did find benefits that were statistically significant in one of the original trials, but that the data was not available in time for the committee’s review.

The final NCD released on April 7 goes into effect immediately. Under the final decision, drugs that are approved through the traditional pathway will be covered if sponsors also engage in CMS-approved studies such as data collection through routine clinical practice or patient registries. In addition, any new drugs in the amyloid-directed monoclonal antibody class that receive traditional approval “may be available in additional care settings that people with Medicare can use, such as an outpatient department or an infusion center.”

Spending $41 billion on drugs without proven benefits

Accelerated approval drugs can also have significant financial implications. Medicare and Medicaid, which provide coverage for 135 million Americans, spent $68 billion through 2020 on new drugs granted accelerated approval between 2012 and 2017, three-fifths of which was on drugs for which post-approval trials to validate the clinical benefits were either not performed or confirmed.

Congress is now considering reforms to the accelerated approval pathway in hopes of resetting the balance for patients between timely access to treatments and confirmation of their benefits. These reforms are being considered as part of user fee legislation that authorizes FDA to collect and use fees paid by pharmaceutical companies to support new drug reviews.

The proposed reforms are intended to support the FDA in holding manufacturers accountable for their post-approval confirmation trials. The proposed legislation would require that pharmaceutical companies initiate confirmatory trials by the time of the accelerated approval. This would increase oversight of trial design and mandate that manufacturers provide routine progress reports for studies.

Additional provisions being considered include having the FDA facilitate enforcement of the approval standards. This would include automatic expiration of accelerated approvals without proof of benefit, either one year after study completion or five years after approval. Removing the proposed additional requirements to offer manufacturers meetings with advisory committees or the FDA commissioner prior to acting would also minimize delays in withdrawing indications that pose ongoing clinical and financial risk.

Payers, Providers Push Back

If drug developers want to continue pursuing this accelerated track to market, they will have to do their homework with payers to explain the special requirements of their phase 1 drugs. To help payers adapt, drug makers will need to get out early and educate payers to compensate for the absence of phase 3 data.

In 2021, America’s Health Insurance Plans (AHIP) weighed in on the topic in their Dec. 6 article entitled, New Studies Show American’s Are Paying for Unproven Drugs. Citing the JAMA study, the article underscored the claim that the FDA and manufacturers are not always following through on their obligations to complete the required validation research on drugs coming through the accelerated approval pathway. The article went as far as to suggest that some drugmakers may be viewing the accelerated approval pathway to circumvent the normal drug approval process.

Despite many years of focus on evidence-based medicine, significant resources are still expended on care that provides little to no value. Payers and patients continue to pay a staggering price for hundreds of drugs that have yet to prove their clinical value. The dollars lost to these unproven drugs has soared into the billions, and the industry is taking notice. Allowing drug manufacturers to game the system to keep these drugs on the market while ignoring their responsibility to protect patients and hardworking American families must be addressed sooner rather than later.