The Balance Between Drug Safety and Availability

In this Breaking Down Health Care conversation, John Hennessy, MBA, and Michael Kolodziej, MD, discuss the process of drug approvals and the role of the US Food and Drug Administration, including how and why the process takes so much time—and can add to the cost of treatments once they hit the market.

Read the transcript:

John Hennessy, MBA: Welcome to Breaking Down Health Care, where we'll be discussing evolving topics in health care in the United States. I'm John Hennessey; I'm a principal at Valuate Health Consultancy. And for this series, we'll be in conversation with Mike Kolodziej, an oncologist and currently an advisor to ADVI and Canopy.

Today, we're talking about the balance between drug safety and drug availability. And Mike, the organization in this country that does a lot of that work is the FDA. So, how about just a primer on the FDA and what it does and why it's there?

Michael Kolodziej, MD: Yeah. So, the FDA is a huge government agency. And I think it's fair to say that it touches every American every single day. Its purview is vast, from agriculture to baby formula to over the counter and dietary supplements to the drugs that we just treat our cancer patients every day. It's just got a vast—tobacco, alcohol, it's got everything; it’s got everything.

And the FDA sort of changed a little bit over time. You know, it's been around for 120 years. But the FDA as we know it today really changed with thalidomide. And I'm not talking about thalidomide for multiple myeloma; I'm talking about thalidomide when it was being marketed as a mild sedative for pregnant women and treat morning sickness—late 50s, early 60s.

It was very popular in Europe. It never actually completely got approved in the United States, and it didn't get approved in the United States because there was a medical officer at the FDA who basically said there's just not enough safety information. That medical officer saved Americans incredible heartbreak because it subsequently became clear that thalidomide, although it did work, it was an effective sedative and an effective treatment for morning sickness, also caused a terrible birth defect. And I think many of the people listening to this have seen the photographs of the children born with the deformed limbs, called phocomelia.

And the FDA, they earned their stripes right there. They really helped save Americans from a disaster. And so, the FDA's charge is safe and effective: it has to be safe, and it has to be effective. And after thalidomide, there was a lot of focus on safe. Safe became the thing.

Now, when you adopt that mindset, safety, it can slow things up, especially when you also have to consider effective. And so, what happened over the ensuing 30 or so years was that the drug approval became very slow, 7 years to get a drug through the FDA, just really slow. And I think, you know, partially because of AIDS in the mid to late 80s, partially because of oncology, there was a human cry for more rapid access to potentially life-saving drugs.

And so, the FDA, and they might disagree with me—but I'm an observer of this—the FDA, they changed their personality. They became much more interested in trying to grease the wheels of progress and get access of these new and effective therapies to people who were in need. And believe me, both of us kind of lived through the HIV epidemic, the AIDS epidemic. That was horrible. That was just horrible. And the same can be true for the era of cancer medicine before we started seeing our breakthroughs in the 1990s.

The response of the FDA really was to develop more accelerated approval pathways, get the evaluation done in a more rapid fashion. Now, in order to do that, the FDA had to change some of the rules. Now, they will deny this, but they did change some of the rules. They decided that they would accept somewhat less than optimal evidence to approve a drug.

So, in order to do that, they had to accept what are called surrogate endpoints. So, in our universe, in oncology, the question was always, always did it save lives? Did the medicine prolong your life? And in order to answer that question often you had to do a randomized clinical trial where patients got randomized to either a placebo or the standard of care, and then the experimental arm was compared, and survival was the end point. But for a lot of diseases, let's take breast cancer, for example, patients can live with metastatic breast cancer for many, many years. So, if you're waiting for that readout, people will not have access.

So, they changed. And especially the oncology group decided they would accept something called progression-free survival. In English: How long was the cancer controlled? How long before the cancer started to grow again? And the idea was that that endpoint, progression-free survival, would be a surrogate for absolute survival.

In other words, if the drug slowed the progression of the cancer, it's not illogical to think that it might extend your life. But the logic has got nothing to do with it. Because it turns out that progression-free survival is not a great surrogate for a lot of drugs and a lot of diseases.

So, we got into a new groove where people wanted drugs fast, but the drugs didn't necessarily deliver in the fashion that they were supposed to.

Hennessy: So, when we think about these accelerated approvals, certainly one of the challenges is moving from accelerated to a full approval and making sure that actually happens, and we've had a lot of conversations about that. There's currently a debate about whether these accelerated approvals have actually changed patients' lives. Have they added life years or not, or the same?

What do you see in terms of these accelerated approvals and where we're going with these? And I think from the conversation we've been having, the health plans and people are paying for these things, what do we do when we find out later that they weren't as effective as we thought they were?

Dr Kolodziej: Yes, yes. So, you touched on a very important point, which is that although we can perhaps concede that the evidence for accelerated approval is not as robust as that for full approval, the price tags are exactly the same. And we've already talked about how much new drugs in oncology cost.

The truth is that the solution was inherent in the construct of accelerated approval. And that solution was the requirement for the sponsors of the novel agent to submit confirmatory evidence that validated that the surrogate result was the same as the ultimate result. And if that was not confirmed that the drug would be withdrawn. Until recently, that has been a relatively unusual development.

And to be honest, until fairly recently, the FDA wasn't very tough on companies to complete their follow-up studies. But the political climate has changed, and now it's acknowledged that those follow-up studies have got to be done. And if the data doesn't confirm that efficacy that we thought was present, that those drugs, they should go. And we've started to see some of that at the FDA—we need to see more than at the FDA.

That, in fact, is the primary mechanism by which we safeguard the efficacy part of the FDA mandate. Now, in the blog I also talk about another potential idea, which I happen to like, but I'm sure the drug companies hate. And that is that if you get conditional approval, you get conditional payment. You don't get every nickel that you wanted. We arrive at a fair market entry price, and then we finish our confirmatory trial. And then if the cover trial is negative, then, [blows raspberry] you're gone. But if the confirmative trial is positive, depending on how positive it is, we'd establish a new price for that therapy based on its value.

And in fact, that kind of mechanism is currently in use in Germany. It's very much how the Germans pay for novel therapies. They usually index the price at the beginning to what the current standard of care is, and then they give you a chance to prove your benefits.

There's another way we could do this, and that is outcomes-based contracting, which means that you get a certain payment upfront, and if at certain landmark points in the future you have achieved an outcome, you get paid more. Now, you might argue that that's not the FDA's business. But the FDA should not continue to pretend that they operate in a vacuum. They do not. They should collaborate with other entities, including Medicare, to try to execute on that kind of outcomes-based, landmark-based reimbursement model.

The reason this is so topical right now is because this business about the FDA not talking to CMS resulted in a catastrophic failure of the system with the new therapies for Alzheimer disease. So, as you may recall, Aduhelm was approved by the FDA despite a lot of controversy. And CMS basically said, “We don't like the evidence; we're not going to pay for it except on a trial.” And that, of course, was the death knell for that drug, which has now been withdrawn from the market. But had the FDA and CMS gotten together and chatted a little bit about the quality of the evidence and how this ought to be moved forward into the clinical space, we could have avoided the embarrassment on the part of both agencies.

And I would argue that as we think about some of the new stuff coming down the line—and gene therapy is the one that I talk about in the blog, and it's a really important one because it's going to be so expensive—FDA and CMS should get together because you can link the postmarketing approval data requirements to landmark payments, make them overlap. Fix it so that if you meet the landmark, you get a payment.

And that landmark meets the needs of the FDA as well. And I think that kind of interagency and even interindustry cooperation could help us figure a way to deal with these really incredible new therapies that we just don't know how good they're going to be. We just have no idea.

Hennessy: Two things strike me in our conversation. First is the notion of safety, and that the notion of safety might be different for someone in very late-stage disease than in early stage disease. And patient advocacy groups may have a different idea of safety than you or I might have for a relative who's afflicted by a particular disease.

The other note is this concept of value-based care or outcomes-based agreements. And to your point, they exist out there; they’re largely being driven commercially. Crizotinib is a perfectly good example, where they have a promise that if clinical results aren't driven by a certain point in time, they will refund the money spent. Now, that may not be—because it's a novel agent, it may be because it's in a different point in its life cycle.

But we're seeing warranties and things like that. Is that something the market should drive? Or is that something the FDA should have more of a hand in?

Dr Kolodziej: Yeah. The problem with the market driving it is everybody wants to negotiate their own deal. The beauty of having the FDA and CMS do it that, especially for certain diseases, they are the predominant pair. Alzheimer is a perfect example. I mean, yes, there are commercial health plan beneficiaries who have Alzheimer disease, etc. But it's really Medicare that was going to drive coverage for that specific therapy.

And that's true, of course, for a lot of cancers as well, because cancer is mostly a disease of aging. It's just a much larger, more captive population. It's just a contract. It's just a negotiation, as opposed to a United negotiation, and Aetna negotiation, etc, etc. Honestly, I think if you do it right, those commercial health plans will want to sign on. It'll just be an attractive way for them to deal with the uncertainty that they're forced to deal with right now.

And honestly, for the most part, they get in a situation where they can't say no for a gazillion different reasons.

Hennessy: Yeah, part of the reforms in the last few years has been a proposal by CMMI to help, actually Medicaid, say Medicaid plans work together to develop these value-based agreements for cell- and gene-based therapies, and we're seeing stop-loss carriers and others in this space. But, to your point, you're having a bazillion different iterations this probably isn't all that efficient either.

Dr Kolodziej: No, not at all. And yes, I think the CMMI Medicaid thing is a wonderful idea. Let's see if it—you know, I lived in Missouri, so show me.

Hennessy: There you go. Is it possible the FDA can get to where we need it to be, or has it just evolved into a sort of turnstile, where it just can't bring that economic element, whether that's just financial economics or even societal economics into the decision-making in that space it inhabits.

Dr Kolodziej: So, the fact of the matter is that both FDA and CMS are very political agencies; the heads of the agencies are political appointees. So, under the Trump administration Scott Gottlieb was head of the FDA. I thought Scott was an excellent head of the FDA, did some very interesting things. Currently, Rob Califf is head of the FDA; he’s completely different, has completely different view of the role of the agency.

That political appointment stuff, and the fact that the new commissioner often has some sort of shared vision with the administration in the White House and the party that's in power, that affects what the agency can do. These are complicated deals. They take years to execute, and when there's a transition of administration, we lose some continuity.

Hennessy: So, the final thought here, given that we think it's going to be tough for the FDA to change, I for one was sort of surprised how aggressive CMS was with Aduhelm. Is it the CMS change? Is that what's left to sort of deal with this bending the cost curve that we think we certainly need to do at some point when we hit 30% of GDP spending on health care? I don't know what we'll be up to, does Medicare have to change?

Dr Kolodziej: Well, I will guarantee you that if we have Medicare for All, it will change. We will see significant tightening of medical policy, and it'll be defended by the quality of the evidence and sort of the CMS mantra about what is appropriate for coverage or not.

So, will it change? It will have to change. It will have to change. And, again, we get back to the political reality of people not liking the word “no” when it comes to health care. And then every other country in the world, even though they may have national health insurance, they also say no.

Hennessy: Well, we're going to say yes to continuing conversations here. We want to thank you for watching this installment of Breaking Down Health Care. We hope you enjoyed the conversation and learned something you didn't know about the health care system in the United States. If you have questions or topics you'd like Mike and I to discuss, you can use the Contact Us feature on the website. So please tune in for future conversations. We look forward to seeing you.