Rand Issues Commentary to The Boston Globe: Why Won't Health Insurance Companies Pay for New Drugs?

SANTA MONICA, California, April 19 (TNSres) -- Rand issued the following commentary to The Boston Globe on April 18, 2024:

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This commentary originally appeared on The Boston Globe on April 10, 2024.

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Why Won't Health Insurance Companies Pay for New Drugs?

By Zachary Predmore

On January 6, 2023, the Food and Drug Administration granted accelerated approval for a new treatment for Alzheimer's: Leqembi, a drug that may slow the disease's progression.

And yet mere hours after its approval, the Centers for Medicare & Medicaid Services (CMS), the largest insurer in the country, announced that it would not cover the drug for Medicare patients. The Alzheimer's Association, a nonprofit that advocates for patients and caregivers, responded to the decision by saying that the CMS's refusal to cover the treatment was "unprecedented." Indeed, other federal health programs covered the drug right away, including the Veterans Health Administration. The CMS agreed to cover Leqembi later in the year, once it had obtained full approval from the FDA, but only for patients meeting certain criteria.

The FDA has steadily increased the speed at which it approves new drugs over the last two decades. In 2023, the agency approved 55 new drugs, up from 21 in 2003. The great majority of drugs are now approved through its accelerated program, leaving the FDA wide open to criticism that its standards are too low and that it is simply acting as a rubber stamp for pharmaceutical companies. Under the accelerated program, the FDA grants approval for the drug to be put on the market and later grants full approval after clinical trials confirm a drug's effectiveness.

The FDA started fast-tracking new treatments partly in response to lobbying from pharmaceutical companies and patient groups. When the FDA approved a treatment for a form of ALS in 2023, it cited patient perspectives as one reason for the approval. Patient advocacy was a major driver of attention to the disease: The "ice bucket challenge" in 2014 highlighted the experiences of people living with ALS and resulted in a flood of donations to fund research into possible treatments. Although this newly approved drug (toferson, marketed at Qalsody) did not slow disease progression in clinical trials, in the year since approval physicians prescribing the drug have reported that it improves patient quality of life and allows more patients with ALS to live independently. Despite these reports, several insurers have refused to cover this treatment, claiming it is "not medically necessary."

These are far from the only examples. In 2017, insurers raised concerns about the high cost of the drug Dupixent, which treats skin conditions like eczema that are not fatal but severely affect patients' quality of life. Many insurers, including Medicare, do not cover the high-priced weight loss drug semaglutide, also known as Wegovy, despite major patient demand for safe and effective weight loss treatments. This puts such treatments beyond the financial reach of all but the wealthiest or most well-connected patients.

The medical establishment hasn't always been great about listening to patients. For example, hospitals and health care networks for years went on the assumption that patient surveys were unreliable and biased. And as studies have shown, doctors more often ignore complaints about pain from female patients. Such disregard for patients' points of view hasn't entirely gone away, but now terms like "patient-centered care" or even "patient-led care" are increasingly common in health policy circles and doctor's offices. Both mean a shift from a paradigm of care that privileges the doctor's direction above all else toward one that privileges informed consent and patient rights.

The FDA is prioritizing listening to patients by approving treatments quickly--and in spite of the insurer backlash against accelerated approvals. The FDA is right. Patients, especially those with diseases for which few therapeutic options exist, weigh risks against potential benefits differently than government agencies do. If treatments have a chance of working, patients should have affordable access to them, even if some of them are later proved to be less effective than previously thought. As long as patients are fully informed, the choice should lie with them.

So why are health insurers standing in the way? The major issue for insurers is cost. Insurers resent that drug companies can charge full price for a treatment that may or may not work. That things work this way could change. Instead of refusing to cover a new drug, CMS and other insurers could condition the price they pay for a certain drug on its ability to achieve specific outcomes, including outcomes that are important to patients. If a drug like Leqembi was unable to slow or prevent Alzheimer's to a measurable extent, for example, the drug's manufacturer would have to pay back a portion of its profits to the insurer, effectively lowering the price of the drug and leaving drug manufacturers on the hook for the high costs of ineffective drugs.

It is not wrong for CMS and other insurers to be cautious and selective about making drugs accessible to patients, especially if there's little evidence to prove that they are effective. But when it comes to a disease like Alzheimer's, patients and caregivers have waited years for a potential treatment. Their experience echoes that of AIDS activists in the 1980s, who spurred the FDA to approve early HIV treatments more quickly. Though those early treatments often came with harsh side effects, patients wanted them anyway, and those early approvals led to more effective and safer treatments, which revolutionized the care of people living with HIV.

The AIDS example is one of our most important proofs of why listening to patients matters. The FDA has learned that lesson. Health insurers should follow its lead.

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Author:

Zachary Predmore is an associate policy researcher at the nonprofit, nonpartisan RAND. His research explores how to incorporate patient perspectives into the U.S. health care system and how to measure patient preferences for new treatments.

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Original text here: https://www.rand.org/pubs/commentary/2024/04/why-wont-health-insurance-companies-pay-for-new-drugs.html