Michigan Association of Health Plans

FDA fast-track drug approvals are costing Americans

This article was posted in Crains Detroit Business. Read more here

America represents 4% of the world’s population, yet we consume 60% of all prescription drug sales made on Earth. We use prescription drugs more frequently than anyone in the world, yet pay nearly three times more for them than other industrialized countries.

There are now almost 20,000 Food & Drug Administration (FDA) approved prescription drugs on the market in America — more than in any country worldwide. According to a United States Health & Human Services report issued this month, over half of the new drugs in the world are launched first in the U.S. before being launched in other countries.

The U.S. has become the “pin cushion” for worldwide pharmaceutical experiments because the FDA has recently laid out its welcome mat for new and emerging drugs by creating a “fast-track” accelerated FDA approval process. This “wild, wild west” expedited approval process does not have the same rigorous guidelines that ensure the drug provides clinical benefits, thus creating uncertainty about long-term efficacy. Instead, the FDA grants conditional approvals based on interim data and requires additional studies to confirm clinical benefits later.  As a result, to date, the FDA has withdrawn approval for roughly 20% of therapies specific to cancer treatment, which have been subsequently proven to have no clinical benefit.

Drug manufacturers launch new drugs in America because they have greater latitude to set prices here and use those prices to set external referencing points elsewhere. Furthermore, the fast-track FDA approval process does not undergo a cost-effective analysis for new drugs. That means the government doesn’t set the price nor analyze whether the drug is worth the price paid. As such, insurers must diligently monitor a drug’s clinical outcomes, value and costs to our healthcare system.

In recent months, gene modification procedures and GLP-1 prescription drugs have grabbed national headlines for their potential advancements in treating rare cancer diseases and weight loss. Make no mistake, the promise of these advancements is both life-altering and lifesaving. These medical advancements hold a lot of promise when used appropriately. However, sufficient clinical long-term studies are crucial to minimize reversals that cost money and hurt consumer health.

The FDA approved the first gene modification procedure (CAR-T) in 2017 to treat acute lymphoblastic leukemia. Before this, gene modification procedures were only used in experimental clinical trials. The number of applications for new gene modification procedures has flooded the FDA in recent years, as more than 2,000 new gene modifications are already being developed for potential FDA “fast-track” applications. According to The Institute for Clinical and Economic Review, cell and gene modification procedures cost between $1 million and $2 million per treatment.

Glucogon-like peptide 1(GLP-1) drugs traditionally used to treat diabetes have been shown to decrease appetite, making their use for weight loss popular. The FDA has approved just two drugs for on-label use for treating weight loss, but there is little doubt that the FDA’s doors will be busted down with countless new weight loss drug applications from drug makers. These GLP-1 drugs are priced at $1,000 per month and can continue into perpetuity. These drugs are not a cure for weight loss but rather a supplement used alongside diet and exercise to promote long-term weight loss. Manufacturers of these drugs have attested that people regain two-thirds of the prior weight loss on average after discontinuing the use of these drugs. 

Some insurers are attempting to address the high cost of gene modification procedures and GLP-1 drugs through re-insurance programs or via optional riders to policies to be responsive to customer requests. However, these programs often increase premiums for all customers. At a time when affordability is nearing a crisis state, we must join hands to drive towards solutions that drive the highest outcomes, quality, and affordability.

Health insurance providers have a duty to seek out and eliminate waste to keep costs down for those that they insure. With the FDA’s fast-tracked approval process, insurance providers are forced to impose even greater clinical efficacy standards.  It is essential that we preserve the ability for health insurance providers to evaluate efficacy and find a delicate balance between access to lifesaving medical advances and paying for therapies that don’t work. Everyone in health care delivery, from the FDA to the consumer, must be more focused on outcomes, quality and cost benefits.

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