Quantifying Impact of Accelerated Approval Drugs on Medicaid Spending: De Minimus Impact, Maximum Attention
States seek to limit coverage of drugs approved through the FDA’s accelerated approval pathway designed to accelerate availability of medications that treat serious or life-threatening conditions – many cancers, HIV/AIDS, sickle cell and several other rare diseases.
A new national and state analysis of Medicaid spending from 2007 to 2020 shows:
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From 2007 to 2020, accelerated approval medicines accounted for well under one percent of total Medicaid spending, not including drug rebates.
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At the national level, spending on accelerated approval drugs also accounted for just 0.5% of overall growth in national Medicaid spending between 2007 and 2020. Hospital spending (30%) and physician and clinical services (15.4%) were the primary drivers of growth. After accounting for drug rebates, retail prescription drugs accounted for 5.0% of growth.
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Accelerated approval drugs accounted for less than 1% of the growth in Medicaid spending in 48 states and the District of Columbia. Only Alabama (1.3%) and South Dakota (2.1%) were slightly higher.
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In states requesting Medicaid waivers due to cost concerns, 2020 spending data shows accelerated approval drug spend is miniscule - Massachusetts (0.1%), Tennessee (0.4%) and Oregon (0.1%).
These data support preserving access to accelerated approval drugs for the seriously ill.