FDA’s Controversial Aduhelm Approval: What Happens Next?
Read Time: 4 Minutes
The FDA caught a lot of flak in June when it approved Biogen’s Aduhelm for the treatment of Alzheimer’s. To learn what happens next for Aduhelm with other government stakeholders, Eric Dimise of GLG’s Healthcare Events team spoke with Michael Adelberg, Principal at Faegre Drinker Consulting, where he leads the Healthcare Strategy practice. Prior to his current position, he logged 25 years of experience and held several senior positions during his 15 years with the Centers for Medicare & Medicaid Services.
What are the basics of the national coverage determination (NCD) process?
NCDs describe the circumstances for Medicare coverage nationwide for a specific medical service, procedure, or device. Often, Medicare has followed the FDA, but there could be good reasons Medicare would choose not to cover everything that the FDA approves. In the hypothetical, for example, Medicare might not need to cover a drug exclusively for pediatric populations given the population it serves. Coverage decisions are based on a reasonable and necessary standard.
CMS has the option to go to outside expert panels, such as MEDCAC, and likely will do so in this case. If it does go to an outside expert panel, then nine months could be the trajectory. However, that won’t entirely end the process because there is still a public comment period then a short period for the agency to finalize the decision. Given the profile and the controversy that has surrounded this approval, I find it likely that this NCD decision-making process will be on the long side. It’s also likely that there will be a rich body of public comment.
What type of expertise could we expect to see on this panel?
It’s possible that because of the profile of this drug and the controversy surrounding its approval, there will be political forces influencing the final decision that might lessen the sway of the external experts, and for that matter, the agency’s senior clinicians. But the type of competencies that the Centers for Medicare & Medicaid Services (CMS) seeks for these expert panels to some degree overlap with whom the FDA would seek. In addition to that, CMS, as a payer faced with an expensive drug that might be used by millions of beneficiaries, may consider economics in a way that the FDA doesn’t.
It is worth noting that the NCD process is not supposed to be driven by cost. But this time, it will be hard to ignore cost.
Might CMS go the demonstration project route?
CMS has broad demonstration authority. For example, it can waive a requirement for the purpose of demonstrating that there would be improved healthcare outcomes or cost savings to Medicare. That’s a way you could back into approving Aduhelm without ever even issuing a formal NCD. But establishing a demonstration (or a model) is typically a long process. In terms of how demonstration authority could conceivably tie into Aduhelm, it could pave the way for alternative financing. Maybe the agency is not enamored with the price tag and could propose some type of value-based reimbursement. If the drug is successful enough to reduce healthcare or custodial care costs, the saved costs could form the basis for an alternative payment model. That’s complicated, but the agency might very well be thinking about that.
Could CMS just refuse to cover Aduhelm? What is the probability that would happen?
There’ve been NCD processes that have resulted in a noncoverage decision, so it’s possible. There’s a lot of pressure on the agency to do something to help people with Alzheimer’s and mild cognitive impairment heading to Alzheimer’s. The fact is, the FDA approved the drug, so it seems unlikely that CMS would simply refuse to cover it. Because in doing so it could be argued that it’s denying payment for the drug to Medicare beneficiaries. But again, this is an unprecedented situation, and we don’t know for sure what the CMS will do.
One of the major payers for Alzheimer’s care are state Medicaid programs. What are we hearing from states about covering this drug?
This is the most underreported part of this story. This is a huge deal for state Medicaid programs in two ways. First, Medicaid is the primary payer for Alzheimer’s care, month after month in a nursing home, or paying for a personal attendant to take care of someone in their home. If Aduhelm is helpful in delaying the onset of Alzheimer’s or delaying the severity of Alzheimer’s so people can stay in their homes longer, that is an enormous financial benefit to Medicaid.
Second, Medicaid programs pay for FDA-approved drugs if the drugmaker agrees to sell the drug to Medicaid at its best price. It’s not inconceivable that Medicaid programs will pay for Aduhelm if Medicare doesn’t. States are very interested in this, and the National Association of Medicaid Directors recently sent a letter to CMS encouraging Medicare to cover the drug in the interest of protecting the states from a scenario where they cover the drug.
What is your take on the potential outcomes of the congressional investigation?
The FDA is getting pounded over the approval of Aduhelm. We’ve seen much finger-pointing within the FDA and its advisory bodies. We’ll likely see the most blowback at the FDA, not CMS. There’s a little bit of irony here. The FDA process is not set up to consider costs. In fact, when Congress has had the opportunity to build costs into medical technology approvals, it has explicitly decided not to give federal agencies the authority to do so. This is the legacy of the “death panels” rhetoric that complicated the passage of the Affordable Care Act.
Maybe Congress will take a lesson from all of this. Europeans are much more willing to be explicit about the role of cost in making coverage determinations. Through a measure called QALY, they are willing to say, “This drug/device may very well be somewhat effective, but it’s not effective enough for the cost, so we’re not covering it.” The United States has not yet been willing to have that conversation.
Questions addressed during the teleconference:
- What was your immediate reaction to the FDA’s approval of Biogen’s Aduhelm (aducanumab) back in June, in particular regarding any specific headwinds and tailwinds, told from your professional background and perspective?
- Regarding the national coverage decision, or NCD, process that is underway at CMS, can you very quickly cover the basics of the NCD process, delineate how this scenario is different, and comment on the timeline that we can realistically expect for the NCD to be finalized?
- If CMS decides to convene a panel of independent experts as part of the NCD process, what type of expertise might comprise the panel, what sway would their input have on the final decision, and how is it alike and/or different from an FDA advisory committee?
- Digging in deeper on the fact that this NCD pathway is a bit unusual, can you help us understand how this may, or may not, set a precedent for other similar drugs or in any other way impacting future NCD processes?
- Please describe the coverage with evidence development, or CED, process, and explain how probable it is that a CED will be applied as part of the Aduhelm NCD.
- How probable is it that there will be a CED and what role does political, media pressure, etc., play on CMS’s potential decision-making?
- How could CMS’s coverage of Aduhelm evolve over time if a CED is put in place, as more data is collected, and as more real-world experience is gained?
- What is the likelihood that CMS will mandate a demonstration project? Start by explaining what a demonstration project is and then explain the grounds for one in the case of Aduhelm and potential implications.
- Could Medicare administrator contractors, or MACs, convene prior to the completion of the NCD and, if they do, what are the potential outcomes and implications?
- Could CMS refuse to cover Aduhelm and, if yes, what is the probability this would occur? Is there precedent for such a decision?
- Could CMS demand or somehow require a lower price for Aduhelm? Is there a mechanism to do that?
- One of the major payers for Alzheimer’s care are state Medicaid programs. What are we hearing and understanding from states about covering this drug under Medicaid?
- How narrow could CMS define the criteria for coverage of Aduhelm?
- Until the NCD is complete next year, what are the routes through which providers, infusion centers can be reimbursed through a CMS program, or is it just not going to be covered?
- Several insurers and healthcare providers have publicly stated that they will not cover or administer Aduhelm (e.g., several Blues plans, the VA). How do you read this positioning, what are the implications, and how do you see this positioning changing, if at all, in the future?
- How should we be thinking about the role that Medicare Advantage plans play? What are the key questions we should be asking and how are you thinking about it right now?
- Do you foresee Medicare Advantage plans putting in roadblocks to coverage if the NCD mandates coverage as a way to save on costs?
- What are the implications of the ongoing investigations into the approval of Aduhelm, both in Congress and at the Office of Inspector General (OIG)?
- Do you think that Congress will learn from the Aduhelm experience and reconsider cost considerations in the drug approval process?
- How likely are we to see value-based reimbursement models emerge from the entire Aduhelm experience? What are the implications and what precedents could be set?
About Michael Adelberg
Michael Adelberg is a Principal and leads the Healthcare Strategy practice at Faegre Drinker Consulting, where he serves as the firm’s in-house health policy expert tracking federal legislation, regulations, litigation, and other developments across the Department of Health and Human Services. He has 25 years of progressive experience in the Medicare, Medicaid, and Affordable Care Act programs. Prior to his current role, Michael held several senior positions within the Centers for Medicare & Medicaid Services (CMS), including concurrently serving as Director of the Insurance Programs Group and Acting Director of the Exchange Policy and Operations Group, which included responsibility for implementing large parts of the Affordable Care Act. Prior to that, Michael was the Director of Medicare Advantage Operations, where he supervised the review and award of Medicare Advantage contracts and health plan monitoring. Michael gained private sector experience as the Vice President for Government Affairs and Vice President for Product Development with the Universal American Corporation (acquired by Wellcare), a multistate insurer that operated Medicare Advantage and Medicaid health plans.
This healthcare policy article is adapted from the GLG Teleconference “Biogen’s Aduhelm: Washington Healthcare Briefing.” If you would like access to events like this or would like to speak with healthcare policy experts like Michael Adelberg or any of our more than 900,000 industry experts, contact us.
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