In this session, staff presented a draft chapter and recommendations on addressing high-cost specialty drugs. Since 2017, the Commission has been working to identify potential models that could help states address the challenges of high prices. In 2020, MACPAC worked with a contractor to convene a technical advisory panel of drug policy and pricing experts from academia and the private sector, state Medicaid and federal officials, beneficiary advocates, providers, health plans, and drug manufacturers to examine these issues more closely.
This presentation provides an overview of the draft chapter. It summarizes the ideas developed by the advisory panel and discussed by the Commission including a potential model for a new drug benefit for cell and gene therapies. The chapter does not make any recommendations on such a benefit, but lays out the design issues and options that would need to be resolved. Finally, the presentation focuses on drugs that have been approved through by the U.S. Food and Drug Administration under the accelerated approval pathway. Such approvals are based on whether the drug has an effect on a surrogate endpoint that is reasonably likely to predict a clinical benefit; however, unlike under the traditional pathway, the clinical benefit has yet to be verified.
The Commission approved two recommendations as drafted. The first recommendation calls on Congress to amend Section 1927(c)(1) of the Social Security Act to increase the minimum rebate percentage on drugs that receive approval from the U.S. Food and Drug Administration (FDA) through the accelerated approval pathway under Section 506(c) of the Federal Food, Drug, and Cosmetic Act. This increased rebate percentage would apply until the manufacturer has completed the postmarketing confirmatory trial and been granted traditional FDA approval. Once the FDA grants traditional approval, the minimum rebate percentage would revert back to the amount listed under Section 1927(c)(1)(B)(i). The second recommendation calls on Congress to amend Section 1927(c)(2) of the Social Security Act to increase the additional inflationary rebate on drugs that receive approval from the U.S. Food and Drug Administration (FDA) through the accelerated approval pathway under Section 506(c) of the Federal Food, Drug, and Cosmetic Act. This increased inflationary rebate would go into effect if the manufacturer has not yet completed the postmarketing confirmatory trial and been granted traditional FDA approval after a certain number of years. Once the FDA grants traditional approval, the inflationary rebate would revert back to the amount typically calculated under Section 1927(c)(2).
