The Medicaid and CHIP Payment and Access Commission (MACPAC) voted on January 27 to recommend that Congress grant states the ability to limit Medicaid coverage for drugs and biologicals approved under the FDA’s accelerated approval pathway. The Commissioners were presented with two options for recommendation. The first option was for Congress to amend Section 1927(d)(1)(B) of the Social Security Act to allow states to exclude or restrict coverage of a covered outpatient drug based on a Medicare national coverage determination (NCD) including the coverage with evidence development (CED) requirements. The second option would allow states to impose coverage restrictions on drugs and biologicals consistent with those imposed under a Medicare NCD limiting coverage to an approved CED study. Some of these restrictions may include allowing states to link drug coverage to clinical benefits or allowing states to negotiate outcomes-based contracts that provide larger rebates if a product does not achieved specific clinical outcomes measures. It should be noted that the recommendation would not automatically apply to current or future Medicare NCDs to the Medicaid program. States would also not be restricted to follow the Medicare requirements and could provide broader coverage.
Under Medicaid, states generally must provide full coverage for FDA-approved drugs as a condition of receiving rebates under the Medicaid Drug Rebate Program. States have recently raised concerns regarding this coverage requirement, particularly in the context of FDA’s grant of accelerated approval for the Alzheimer’s disease where some states expressed concerns with Aduhelm cost and efficacy data.
The decision to put forth this recommendation was heavily debated by the MACPAC Commissioners. Commissioner Heidi Allen brought up concerns that this could impact patient access, as certain patients might not be able to participate in clinical trials. She also noted that people of color and low-income individuals are less likely to be included in clinical trials, which could affect trial data and outcomes. Other Commissioners, including Dennis Heaphy, also had concerns relating to inequities. However, many of the Commissioners felt these concerns were outweighed by the need for Medicaid programs to have a say in what drugs should be covered to bolster their drug negotiation leverage.
The National Association of Medicaid Directors (NAMD) and the Children’s Hospital Association CHA) also weighed in during the public comment period. NAMD argued that the MACPAC recommendation would provide state Medicaid programs the flexibility to limit coverage of expensive drugs that have poor efficacy and safety data. On the other hand, CHA raised concerns regarding delays in coverage determinations under the recommended approach, which could be harmful for children enrolled in Medicaid. Specifically, the CHA representative stated that “children often rely on off-label uses of drugs, which make up more than half of medications used in a pediatric care.” For those with complex medical conditions, a 90- to 180-day wait to see if a drug will be covered could cause serious harms. After these discussions, MACPAC voted to recommend the second option.
This MACPAC recommendation follows the enactment of statutory changes to the Accelerated Approval Program in the Consolidated Appropriations Act of 2023 (CCA), which were designed to provide more transparency and to modernize to the program. For instance, if the FDA chooses not to require a post-approval study for a drug approved under accelerated approval, the FDA must now publish why the post-approval study is not required. And, if there is a post-approval study, the FDA must specify the conditions that need to be met. The CCA also granted FDA the authority to expedite the withdrawal of a product approved through accelerated approval by replacing the sponsor’s opportunity for a hearing with a more streamlined procedure involving notice and the opportunity for public comment.
The MACPAC recommendation will be included in MACPAC’s March report to Congress.