Recent Trends in Medicaid Spending and Use of Drugs With US Food and Drug Administration Accelerated Approval

Question How much do prescription drugs approved through the US Food and Drug Administration's accelerated approval program contribute to state Medicaid program spending? Findings In this cross-sectional study of 216 drugs granted accelerated approval from 1992 through 2020, relative to all drugs paid for by Medicaid, products with accelerated approval comprised less than 1% of use. Despite their infrequent use, annual net spending on drugs with accelerated approval represented 6.4% to 9.1% of net spending on all drugs covered by Medicaid (in 2015 and 2018, respectively). Meaning Medicaid spending on drugs with accelerated approval represents an outsized amount of spending relative to their use. Importance State Medicaid programs have reported concerns about rising drug prices and spending, particularly regarding drugs entering the market through the accelerated approval program under the US Food and Drug Administration (FDA). The accelerated approval program enables the FDA to approve drugs on the basis of unverified surrogate end points, meaning that clinical benefits for these products are uncertain at the time of approval. However, state Medicaid programs are legally required to cover these drugs. Little is known about the set of products with accelerated approval over time, their use among Medicaid beneficiaries, or the magnitude of their financial influence on state Medicaid programs. Objective To identify the number and class of drugs approved through the FDA's accelerated approval pathway and analyze state Medicaid programs' use and spending on these drugs from 2015 through 2019. Design, Setting, and Participants In this cross-sectional study, biannual FDA reports were used to identify products granted accelerated approval and their associated indications approved between December 1992 and December 2020. State Medicaid Drug Utilization Data files available for 1992 through 2019 were used to estimate national totals for spending and use of outpatient drugs. Main Outcomes and Measures National Medicaid use and gross and net spending on drugs with accelerated approval from 2015 through 2019. Results Since the inception of the FDA's accelerated approval pathway in 1992 through 2020, 216 product-indication pairs granted accelerated approval were identified, comprising 149 unique products. The composition of drugs approved through the pathway has changed over time, with 28 of 30 (93.3%) product-indication pairs receiving accelerated approval in 2020 being indicated for cancer. Relative to all outpatient prescription drugs paid for by Medicaid, products with accelerated approval ranged from 0.2% to 0.4% of use (1.3-2.4 million prescriptions annually). Despite their infrequent use, drugs with accelerated approval represented a minimum annual net spending on all drugs covered by Medicaid of 6.4% ($2.2 billion of $34.6 billion) in 2015 and a maximum of 9.1% ($2.5 billion of $27.6 billion) in 2018. Estimated annual gross spending on drugs with accelerated approval ranged from $4.2 billion to $4.9 billion over 2015 through 2019, and estimated net spending from $2.2 billion to $2.6 billion. Conclusions and Relevance In this cross-sectional study of 216 drugs granted accelerated approval, state spending on drugs approved through the FDA's growing accelerated approval program represented an outsized amount of spending relative to use. Because drugs with accelerated approval have come to market on the basis of trials using surrogate end points, considerable amounts of this spending may have been attributable to products with unproven clinical benefits. This cross-sectional study identifies the number and class of drugs approved through the US Food and Drug Administration's accelerated approval pathway and analyzes state Medicaid programs' use and spending on these drugs from 2015 through 2019.