FDA moving to expand access to experimental drugs

The FDA is taking steps to expand patients’ access to drugs that have not yet been approved for marketing, encouraging manufacturers to exclude fewer people from clinical trials and to publicize their policies about accessing drugs outside of clinical trials, according to a report from Government Accountability Office (GAO Report, GAO-19-630, September 9, 2019).

Clinical trials

Clinical trials often exclude patients by geography, age, or medical condition, and many stakeholders believe that the eligibility criteria are too narrow and exclude patients who are likely to be treated once a drug is approved, according to the GAO. Two recent laws have encouraged expanded access to pre-approved, or “investigational” drugs, the Federal Right to Try Act of 2018, which allows terminally ill patients and their doctors to request access to drugs without an FDA review process, and the FDA Reauthorization Act of 2017, which required the FDA to discuss and report on clinical trial inclusion and exclusion, and requires the GAO to report FDA’s actions to expand access to investigational drugs.

FDA efforts

The FDA has made efforts to make sure that historically excluded classes of people, like children, pregnant women, or patients with liver disease, can gain access to “investigational” drugs that have not been approved for marketing. The agency has met with stakeholders, reported on its meetings, and issued guidance on cancer drugs and on clinical trials more generally.

FDA issued four new draft guidance documents and one finalized guidance document in March 2019, aimed at expanding eligibility for cancer drug trials. Collectively, the guidance recommends that manufacturers attempt to include certain patient populations that have typically been excluded from participation, including children and adolescents; patients with HIV, hepatitis B or hepatitis C virus; patients with brain cancer; and patients with kidney, heart, or liver diseases. Rather than excluding these patients outright, FDA’s new guidance recommends ways to safely include them in trials, such as allowing testing on HIV-positive patients if they have not had an AIDS-defining infection within the past 12 months.

The FDA has more recently issued draft guidance that goes beyond cancer trials, recommending in June that manufacturers examine whether exclusion criteria are necessary to ensure safety or to achieve the study’s objectives, and avoid any unnecessary restrictions to a study’s population.

Despite the FDA’s efforts, drug manufacturers have not generally moved to expand eligibility for clinical trials. Only two out of ten surveyed by the GAO indicated that they had broadened their clinical trial eligibility criteria or intended to do so, while other drug manufacturers said that they had tried other ways to expand access to trials, such as reimbursing travel and hotel costs, or taking advantage of decentralized trials that took place in retail health clinics and patients’ homes, according to the report.

Beyond clinical trials, patients can also request access to investigative drugs through the FDA’s expanded access program or the federal Right to Try Act, and the FDA is taking steps to raise awareness about those programs. While the FDA has tried to use both programs to increase access to investigative drugs, it can only go so far, since neither program compels drug makers to provide access outside of a clinical trial.

The GAO received mixed feedback on the FDA’s program. Some physician and patient advocacy groups criticized it as too complex and burdensome, while others pointed out that the FDA approves most requests—99 percent in 2017—and that manufacturer’s approval is a bigger factor in preventing patient access.

The FDA has tried to simplify and improve the expanded access process, simplifying forms and enlisting an outside partner to help physicians and patients find drug manufacturers’ expanded access policies, according to the report. The FDA has also started a pilot program to assist oncologists with requests for investigative drugs, and created a streamlined process for institutional review board approval, both of which have been well-received by stakeholders.

The newer Right to Try Act also received mixed reviews in the GAO’s study, with some physicians and medical ethicists questioning whether the program, which eliminates FDA review, could compromise patient safety without solving the more common obstacle to improving access, which is manufacturers’ cooperation.

Drug manufacturers remain skittish about the FDA’s handling of adverse events that occur under the FDA’s expanded access program, despite recent guidance saying that such events have not prevented FDA from approving any drug. Two out of ten drug manufacturers said that recent the FDA guidance did not quell their concerns, and four in ten said that manufacturers’ concerns about the issue “may never be fully resolved.” FDA officials, for their part, told the GAO that data from the expanded access program has been commonly used to support drug approvals, and only very rarely has led to a clinical hold.

The GAO also tracked drug makers’ efforts to communicate with patients about access to investigative drugs, finding that 23 of 29 manufacturers surveyed communicated their position to potential patients. Nineteen said they would consider requests for investigational drugs outside of clinical trials, while four said they would not consider requests, with two citing safety concerns. Most of the manufacturers willing to accept requests included an estimated time frame for responses, and five mentioned specific drugs for which they would consider requests.

CVS-Aetna merger approved, subject to divestiture of PDP business

The federal district court in the District of Columbia has concluded that the proposed consent judgment allowing the merger of CVS Health Corporation and Aetna, Inc. is in the public interest. The merger may go forward under the condition that CVS divest Aetna’s individual Medicare prescription drug plan (PDP) business to WellCare Health Plans, Inc. The court considered objections to the merger raised by industry, consumers, and states, and concluded that the divestiture will effectively remedy the harm to the PDP market and will not be rendered ineffective due to the proposed judgment’s failure to address effects in markets adjacent to the PDP market (U.S. v. CVS Health Corporation, September 4, 2019, Leon, R.).

In response to the proposed merger between CVS and Aetna, the United States simultaneously filed a complaint and a proposed consent judgment in 2018. Under the terms of the proposed consent judgment, CVS would divest Aetna’s individual Medicare prescription drug plan (PDP) business to WellCare Health Plans, Inc. A number of parties including members of industry, consumer groups, and state regulatory bodies (amici) opposed the proposed consent judgment and filed briefs stating their concerns. As part of its review under the Tunney Act, the court conducted a hearing with witnesses from parties and amici.

The court concluded that the proposed consent judgment is in the public interest, although it did reject the government’s assertion that the court may only consider harms alleged in the complaint. The amici briefs raised three primary objections to the merger. First, that Aetna’s divestiture to WellCare will not effectively remedy the harm to the PDP market, because the divestiture leaves the PDP market overly concentrated and WellCare will not be as strong a competitor in the PDP market as Aetna was. On this point, the court found the evidence from CVS and the Government to be more persuasive. That evidence included testimony that the PDP market is already highly competitive, because plans can be easily compared, and the market is only moderately concentrated. The moderate concentration in the PDP market has neither prevented WellCare from competing in the market, nor prevented price competition from driving premium prices down, in recent years.

Amici also argued that the proposed final judgment’s failure to address effects in markets adjacent to the PDP market will undercut the effectiveness of the divestiture remedy and harm the public. For example, CVS could raise the price of its pharmacy benefit manager (PBM) services when selling the services to health insurance competitors. Such an action could threaten the success of the proposed divestiture remedy because WellCare, which both competes against CVS in the PDP market and contracts with CVS for PBM services, would be vulnerable to such a tactic. But CVS presented more persuasive evidence that substantially undermines this theory. Rival PBMs try to underbid CVS and CVS’s PBM oftentimes competes against its own customers because health insurance companies can move PBM services in house if they consider CVS’s price for contract services too high. That evidence strongly suggests that, if CVS were to raise its PBM prices, customers like WellCare could simply switch to a less expensive PBM or stop contracting for those PBM services altogether.

Finally, amici argued that the proposed final judgment without modification will harm HIV and AIDS patients in need of affordable, quality healthcare. But the court concluded that the record did not establish that the judgment will likely result in CVS gaining the ability to steer patients away from their current healthcare providers (such as the AIDS Healthcare Foundation). The Foundation uses a different PBM and maintains its own pharmacies, therefore it is unlikely that CVS will be likely to steer patients away from the Foundation.

In the Department of Justice press release announcing the settlement, Assistant Attorney General Makan Delrahim of the Antitrust Division expressed pleasure with the decision, noting that the judgment provides a “comprehensive remedy” that “protects seniors and other vulnerable customers of individual PDPs from the anticompetitive effects that would have occurred if CVS and Aetna had merged their individual PDP businesses.”

American Antitrust Institute (AAI) statement. “AAI strongly disagrees with the merits of the court’s opinion,” said AAI President Diana Moss. “On most points, the court simply accepted piecemeal evidence introduced by the DOJ and CVS. The opinion discounts the showing by amici that the remedy will fail to preserve competition in PDP markets and that the merger raises significant vertical concerns ignored by the DOJ in its complaint. The opinion’s statement that ‘[N]otwithstanding CVS’s significant market share, the evidence showed that CVS must compete vigorously to retain its PBM customers’ is divorced from sound economics.”

National review of Medicaid opioid prescribing not yet feasible

The Office of Inspector General (OIG) has determined that limitations of the national Medicaid claims database, the Transformed Medicaid Statistical Information System (T-MSIS), makes a national review of opioid prescribing in Medicaid unfeasible. The system cannot yet identify all at-risk beneficiaries and providers, the OIG reported (OIG Report, No. OEI-05-18-00480, August 2019).

The OIG assessed the completeness of variables necessary to identify beneficiaries at risk of opioid misuse or overdose and the National Provider Identifiers (NPIs) of providers that ordered and dispensed opioids. According to the report, states were missing data necessary for a national review. Some states did not require NPI to be collected. Others included NPI in their data but incorrectly submitted the data or were unable to transmit the data to T-MSIS because of outdated systems. Without a provider NPI, it is not possible to identify all providers who may be overprescribing opioids and take appropriate action, or to identify providers for investigations of fraud, waste, or abuse, the OIG found.

Identification of beneficiaries can be impeded because a Medicaid beneficiary can have multiple IDs within a state or across states. If a beneficiary does have multiple IDs, prescriptions dispensed to the IDs would appear to be for multiple persons rather than one person. The OIG noted in the report that without a unique beneficiary ID, it is not possible to identify all at-risk beneficiaries in need of opioid-related treatment and conduct proper monitoring of services to protect beneficiaries from inadequate coordinated care.

States also have failed to report diagnoses codes for all services despite being required to do so. Without a diagnosis code, it is not possible to exclude all patients with cancer diagnoses for whom higher doses of opioids may be appropriate or to identify patients’ medical conditions to determine medical necessity for services.

The OIG noted in the report that in August 2018, CMS that all states were submitting T-MSIS data and that CMS was prioritizing T-MSIS data quality. According to the OIG, CMS indicated it would have research files available in 2019. CMS currently has been working with states to improve the quality of data submissions.

Recommendations

The OIG recommended that CMS strive to ensure that individual beneficiaries can be identified at a national level using T-MSIS. CMS should address instances in which a single beneficiary has more than one Medicaid ID within a state. CMS also should prioritize state reporting of prescriber NPIs and issue guidance to clarify the requirements for diagnosis codes.

Medicaid third-party liability changes a challenge for states

The U.S. Government Accountability Office (GAO) conducted a study to see the progress states have made in implementing the changes in third-party liability requirements since the Bipartisan Budget Act of 2018 was passed. The GAO found that the states are unclear on how to collect the required information, update their data systems, and implement the new policies. Adding to the difficulties in understanding and implementing the changes, CMS has issued inconsistent guidance and offers only outdated policy manuals that offer no assistance in implementing the changes (GAO Report, GAO-19-601, August 9, 2019).

Bipartisan Budget Act of 2018

Federal law requires states ensure that Medicaid is the payer of last resort by taking steps to identify Medicaid beneficiaries’ other potential sources of health coverage and their legal liability. The Bipartisan Budget Act of 2018 modified the required processes states must follow when paying claims with probable third-party liability for three types of services. Under the amended statute, states must apply cost avoidance procedures to claims for prenatal care services and pregnancy-related services when it is apparent that a third party is or may be liable at the time the claim is filed. Additionally, states are no longer required to pay claims for pediatric preventative services immediately and may instead require the provider to submit the claim to the third party and wait 90 days (wait-and-see period) for payment before seeking Medicaid payment. Finally, states must make payment for a child support enforcement (CSE) beneficiary’s claim if the third party has not paid the provider’s claim within a 100-day wait-and-see period.

State concerns

According to state officials, several changes to administrative tasks and the Medicaid Management Information System (MMIS) needed to be undertaken to implement the new third-party liability changes and some required research and discussion about the best methods to make these changes. Officials noted that they would need to identify the correct codes in their data systems, establish some sort of indicators in their system to identify which claims were for CSE beneficiaries or had been billed to a third party and when. Some of this additional information would require a data sharing agreement with the state entity maintaining the CSE information while other information would require providers to track down insurance information from a non-custodial parent. Some officials expressed concern that the system changes may require new hardware and system modifications and may make it difficult or impossible to implement the changes, while others discussed waiting for the new MMIS that they were already working to roll out in the future. There were also concerns that the technology changes and the increased administrative work may make the changes not cost-effective to implement.

Stakeholder concerns

Stakeholders were concerned that obtaining accurate information on third-party liability sources for Medicaid beneficiaries and resubmitting claims that result from incorrect or outdated information can be resource intensive and time consuming. Medicaid beneficiaries may be unaware or may not disclose other insurance policies, especially when there are multiple policies by custodial and non-custodial parents or transitions in insurance following birth. Some stakeholders were concerned that rural-based providers may not have the resources to deal with the increased administrative work and delays in payment for services that could result from the payment changes. This may lead some providers to be less willing to serve Medicaid beneficiaries, which would potentially reduce access to care or delay time-sensitive services for children and pregnant women. Some providers may also seek to identify sources of third-party liability before providing services to beneficiaries, which would also delay access to care.

Recommendations

Many states expressed the need for further guidance from CMS on how to implement some of these changes, however, the GAO noted that CMS has issued guidance that is inconsistent with the federal laws and some CMS guidance documents are out of date and not a reliable source of information for states to use in implementing the new requirements. Therefore, the GAO recommended that CMS ensure the agency’s Medicaid third-party liability guidance is consistent with federal law.

The GAO found that CMS has not taken steps to determine the extent to which state Medicaid agencies are meeting the new requirements and indicated that they expect states to comply and will not verify unless the agency is made aware of non-compliance. The GAO recommended that CMS determine the extent to which state programs are meeting federal third-party liability requirements and take actions to ensure compliance where appropriate.