Three takeaways from the CMS Aduhelm decision

Better data, lower prices and an important precedent for restricting access to drugs given accelerated approval by the FDA

Medicare on Friday said it will pay for Aduhelm, Biogen’s pricey new Alzheimer’s drug, only if patients are enrolled in clinical trials approved by the Food and Drug Administration or funded by the National Institutes of Health. These new guidelines will apply to any amyloid-clearing drug approved under the FDA’s accelerated approval program, which allows drug approvals based on a surrogate marker rather than clear evidence it benefits patients.

Separately, HHS Secretary Xavier Becerra said his agency will review this year’s steep Medicare drug plan price hike, which was imposed earlier this year to pay for the estimated 1.5 million people who might have been eligible for Aduhelm under the FDA’s approval guidelines.

You can read the coverage here and here.

This decision sets some important precedents that I think are worth highlighting.

First, by requiring the trials to be government-sanctioned, enroll a diverse population, and have clear efficacy endpoints, CMS is ensuring that medical scientists and the public will eventually learn whether these drugs actually work. If the trials are sufficiently large, the diversity requirement will enable statisticians to tease out the differing responses among different subgroups, whether racial, socioeconomic, gender or disease-severity based.

Second, the fact Medicare will pay for the drugs and treatment of people in the trials means the cost of the follow-up trials to Biogen or other companies will be significantly reduced. Pharmaceutical companies often assert the exorbitant costs of third- and fourth-stage clinical trials is the most expensive part of the drug development process, then use that fact to justify the high prices they place on their products.

If the government ever gets around to giving itself the power to negotiate drug prices, its having paid for the trials that led to final approval (assuming those trials show Aduhelm or other drugs in this class actually work) will be a powerful argument for sharply lowering their price. Aduhelm, whose original price has already been cut in half to $26,000 a year, is still priced way to high given benefits that at best will prove modest.

Third, the Biden administration’s CMS has shown that it is willing to take on not just the powerful drug industry but a deep-pocketed patient advocacy group. The Alzheimer’s Association pushed hard for unlimited access to the drug and government payment under accelerated approval.

While yesterday’s decision only applies to Alzheimer’s drugs that clear amyloid plaques, there are dozens of drugs that have come to market without solid evidence of efficacy through the FDA’s accelerated approval program, especially in oncology. Many companies have never completed the required follow-up trials.

Hopefully, CMS will screw up the courage to apply this precedent to every drug given surrogate marker-driven accelerated approval by the FDA.