9-16-2013 - Pink Sheet - Will Breakthrough Therapies Face Reimbursement Challenges? | Friends of Cancer Research

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9-16-2013 - Pink Sheet - Will Breakthrough Therapies Face Reimbursement Challenges?

9-16-2013 - Pink Sheet - Will Breakthrough Therapies Face Reimbursement Challenges?

September 16, 2013

By Sue Sutter

After an Aetna official suggests there may be reimbursement uncertainty for products developed under the new expedited regulatory pathway, CDER Director Woodcock defends FDA’s review process and says such drugs are expected to be robustly more effective than existing treatments.

FDA and pharmaceutical sponsors may have to combat third-party payer skepticism about the level of evidence supporting approval of breakthrough therapies.

At a Sept. 6 conference on development of companion diagnostics for breakthrough therapies, an Aetna representative said payers are “nervous” about products developed under the expedited regulatory pathway created in the FDA Safety and Innovation Act.

Although payers “love” companion diagnostics because they identify the appropriate patient population for a given drug, “the whole breakthrough diagnostics stuff frankly makes us a little bit nervous,” Michael Kolodziej, national medical director of oncology solutions, said at the conference sponsored by Friends of Cancer Research and Alexandria Center for Life Science.

“We recognize unmet need. We recognize the therapies that are being thrown at these diseases are not very effective. We would like much more effective treatment,” Kolodziej said. “We are not fools, however, and there are no new drugs to come to market that are cheaper than old drugs. … So, we have to find the way to get the right drug to the right patient.”

Kolodziej suggested there is reimbursement uncertainty associated with the new breakthrough designation.

“We have a long history of knowing how to deal with traditional FDA approval,” he said. “We know what accelerated approval means, and we know how [the Centers for Medicare and Medicaid Services] handles that. We want to see how this is going to play out. What is CMS going to do with this?”

“The companion diagnostics, frankly, are the least of our problems because what to do with paying for the drugs is most of our problem,” Kolodziej continued ("Companion Diagnostics For Breakthrough Drugs Also Getting Swift Attention, FDA Says" — "The Pink Sheet," Sep. 16, 2013). “We are looking to wiser people to inform us.”

Center for Drug Evaluation and Research Director Janet Woodcock sought to address the Aetna official’s doubts about breakthrough therapy approvals.

“They’re going to go through the same review process for FDA approval as any other drug would go through,” Woodcock said. “Maybe they will have accelerated approval if they’re using a surrogate, and maybe they will have regular FDA approval. What we expect from breakthrough therapies that actually deliver their early promise is they will be much better than the drugs that we’re using now.”

She acknowledged that some agents designated as breakthroughs will not be approved because of significant toxicities, while the efficacy of some others ultimately will be comparable to that of drugs previously approved for a given condition. “But we expect that a fair percentage of the drugs that we give breakthrough designation [to] will turn out to have activities that have not been achieved before with other drugs.”

As with other new technologies, approved breakthrough therapies will be expensive, Woodcock acknowledged. “I don’t see the problem is they’re going to be kind of mediocre and expensive in general, and they certainly won’t have lower approval standards than other drugs.”

Questions about reimbursement of breakthrough products have arisen in other forums.

Following an FDA patient network meeting Sept. 10, CDER Deputy Director for Clinical Science Robert Temple was asked about payer coverage of such products. Temple said that CMS is not involved in breakthrough talks right now. However, since such products would represent an improvement in therapy for serious or life-threatening diseases, Temple said he could not imagine the Medicare agency refusing to pay for them.