Pressure increases for FDA to approve drugs for rare diseases

July 12, 2023

The Food and Drug Administration (FDA) is under enormous pressure from patient interest groups and pharmaceutical companies to approve new medications for rare diseases for which there is currently no available therapy. This is especially true for diseases like Amyotrophic Lateral Sclerosis (ALS - Lou Gehrig’s Disease), where each passing week leaves patients more disabled and closer to death.

The FDA recently approved Relyvrio, a combination of an old generic medication (sodium phenylbutyrate) and a bile acid (taurursodiol) to treat ALS.  The approval is based on a small phase 2 trial and came after the FDA reconvened an advisory group that had earlier voted not to recommend approval until the results of a larger study were available. The Institute for Clinical and Economic Review (ICER) said that this drug would be cost-effective at a price of between $9100 and $30,700 per year; the manufacturer has announced that the drug will be priced at $158,000 a year.

Here are links to detailed reports of the FDA’s deliberations on Relyvrio in The Daily Beast and the New Yorker.

Once a drug is approved, it is much harder to recruit volunteers into high quality randomized studies to assess effectiveness, as fewer patients are willing to accept a chance that they will be given placebo. It’s also exceptionally hard to revoke approval of a drug if later studies fail to show benefit, and many pharmaceutical companies that benefited from accelerated approval never completed the required studies. In fact, only 19 of 93 (20%) cancer drugs granted accelerated approval between 1992 and 2017 had completed confirmatory studies that showed survival improvement by 2019. Pharmaceutical companies are able to distribute experimental drugs for diseases that are otherwise untreatable under “compassionate use” rules but are not able to bill for them.  After approval, drug distribution is generally restricted to those who have insurance that will pay for the medication, or those who will pay themselves. The FDA is prohibited from considering price when approving a new drug.

Implications for employers:

-        Although we are all eager to have innovative new drugs for previously untreatable disease, premature approval will increase the cost of health care without clear benefit to patients.

-        Some PBMs may exclude expensive drugs like Relyvrio from coverage on standard national formularies

-        Coverage decisions will be difficult for pharmacy benefit managers and employer sponsored health plans when a drug is approved at a high price without clear benefit.

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