There is an interagency cold war between the Food and Drug Administration and the Centers for Medicare and Medicaid Services at the Department of Health and Human Services. FDA wants to approve promising treatments for patients faster.  CMS is more interested in avoiding costs and restricting patient access.

For patients with no or minimal treatment options, there is a great hunger to rapidly advance science and make new treatments available to advance our understanding of diseases and the long-term value of therapies. After years of taking heavy criticism from patient organizations, particularly in ultra-rare disease, the FDA has become more responsive to the needs of patients.

Dr. Peter Marks, who leads the biologics division of the FDA, has been a proponent of using accelerated approval to advance science and approve innovative medicines. His division recently announced an “Operation Warp Speed” for Rare Disease. The intent is to provide a more collaborative and real-time discussion with developers of highly complex and scientifically advanced cell and gene therapies. Starting in 2025, the FDA expects to review 10 to 20 of these cutting-edge treatments annually.

CMS and private payers need to be equally responsive to patients. CMS is tangled in knots over what to do with 21st-century medical innovation. It distrusts faster approvals, preferring traditional methods to collect evidence that can be very expensive and, in certain diseases, nearly impossible.  

With promising Alzheimer’s drugs that the FDA green-lighted under accelerated approval, CMS is responding with a highly restrictive policy for Medicare patients. While few details have been announced, CMS did announce a cell and gene therapy pilot last month to pay less for drugs that have obtained speedy approvals. But further evidence is deemed necessary. Payment could also potentially vary based on what disease is treated.

The lack of detail from CMS on this pilot makes the access and cost implications for patients unclear. Overcoming the FDA’s regulatory hurdles and gaining approval is a significant win for these ultra-rare disease patients. But the battle will not be over for these patients if health plans will not cover the therapies they need.

By holding firm to traditional approvals, CMS is undermining the role of the FDA and continues rejecting what the Affordable Care Act envisioned with value-based payment models. Value-based payments are a way for health insurance companies and drug manufacturers to ensure they are paying for medicines that are helping patients. That means that the insurance company will pay the drug manufacturer based on how well the medicine works instead of just the price of the medicine. Yet, it has been more than a decade since the Affordable Care Act was adopted, and there has been little to show in the way of value-based payment models.

CMS and private payers frequently decry accelerated approval drugs for failing to complete confirmatory trials. There are instances where the payers are right and manufacturers fail to deliver on their commitments, but it is not always so straightforward. There can be challenges in completing confirmatory trials because of patient enrollment criteria, duration of trials and other factors.

This does not mean manufacturers should be off the hook for establishing evidence and demonstrating the value of their treatment to patients. It does mean that how we generate evidence, confirm a treatment’s value and finance therapies must evolve.

FDA Commissioner Robert Califf rightly called on health insurers at their trade association meeting recently to be better partners in collecting evidence for medicines granted accelerated approval. Rather than creating access or affordability barriers for patients, health insurers should be motivated to better understand the therapy and the disease it is intended to treat. As Califf said, “If you spend more of your time generating evidence, you can stop paying for a lot of things, because it would be clear that they don’t work, and, ultimately, your cost would go down.”

Government, industry, scientists and payers must systematically work toward advancing science and technology, developing better care and treatments, and financing the needs of patients and caregivers. The 20th-century health insurance model was designed to cover less expensive medicine to routinely manage chronic conditions. The 21st century is different. Advances in science and medicine are arriving that could not have been imagined 30 years ago. Innovation in how we finance healthcare should follow suit.

The Patient Access and Affordability Project, which I lead, developed best practices in 2022 for assessing the value of rare diseases therapies. They were designed to understand how a therapy meaningfully improves a person’s health and well-being, or doesn’t, over the long term. Payments are based on demonstrating actual outcomes valued by patients and their family members. This means manufacturers and insurers need to work collaboratively to understand the needs of patients and what constitutes value from their perspective. The price of a treatment may shift up or down throughout the lifecycle of a therapy based on evidence collected by the manufacturer and reviewed by the payer. This approach establishes value and cost-effectiveness.

The interagency cold war between CMS and FDA also indicates a larger problem in the healthcare system. Government and private health insurers need to evolve. As healthcare technology and treatments become more complex and expensive, government and private health insurers need to be able to adapt and adjust their policies and processes to meet the needs of their patients. This is especially true for accelerated approval, which is a crucial tool for getting potentially lifesaving drugs and treatments to those needing them.