Though the U.S. continues to lead the world as a life science capital, outspending every country on earth in research and development, the Biden-Harris administration is running a relentless campaign against American innovation.
This includes its threats to exercise march-in rights to the Inflation Reduction Act price controls. As if this were not enough, the administration has pushed many promising cures into the so-called “valley of death,” using unnecessary bureaucracy that devalues the importance of improving a patient’s overall quality of life.
Life science innovation is one of the most challenging and costly endeavors in the U.S. economy. For example, with an overall success rate of 16 percent and an average of $1 billion in research and development costs, it takes nearly a decade for a drug to achieve FDA approval. The aptly named “valley of death” is the gaping canyon between U.S. Food and Drug Administration approval and coverage of innovative therapies by the Centers for Medicare and Medicaid Services (CMS).
A two-pronged approach is needed to eliminate barriers to getting life-saving treatments to patients more quickly.
First, doubling down on FDA reform is essential. The key center reviewing drugs has 5,910 employees, only a fraction of which are directly involved in drug review. By trimming bureaucracy and collapsing middle management, FDA staff can return to its core role of reviewing new innovations to assess for safety and efficacy.
A more efficient FDA can provide customized guidance to innovators and entrepreneurs, helping to move clinical trials into the community setting, promote the use of real-world evidence with outcomes meaningful to patients, and reduce the burdens of data collection. The application of artificial intelligence to the first stage of drug review could massively reduce review time while preserving safety, ensuring that physicians at FDA are not fiddling with statistical software trying to program basic analyses.
FDA efficiency is only half the battle, since innovators must still confront an uncooperative CMS, which keeps finding excuses to deny coverage at every turn.
One strategy used by the agency is “Coverage with Evidence Development,” which requires additional clinical trials on top of those conducted for the FDA. These requirements can span decades. Of the 27 devices or procedures subjected to this procedure since 2005, only four were not still undergoing it as of April 2022. The evidence development system has been corrupted. Originally designed to accelerate innovation, it now poses a huge obstacle. A moratorium on new Coverage with Evidence Development programs is needed until it can be fixed or scrapped. At the very least, these programs must have clearly marked completion criteria and fixed time limits.
CMS also demonstrates hostility toward drugs receiving FDA accelerated approval, which are placed on an expedited review pathway due to their potential to help vulnerable patients. Drugs like Leqembi were placed under Coverage with Evidence Development despite their likelihood to slow progression of early-stage Alzheimer’s. Under the Biden-Harris administration, CMS is building a platform to consistently second-guess FDA, floating a model to cut reimbursement for accelerated approval drugs.
Others go even further. The state of Oregon, for instance, applied for a Medicaid waiver to deny coverage for accelerated approval drugs while a congressional Medicaid advisory committee suggested requiring higher Medicaid rebates for these drugs. Use of the accelerated approval pathway must be encouraged if we want to change the lives of patients, and CMS should stop second-guessing FDA’s licensure decisions.
Sometimes CMS simply drags its feet. It took more than three years for the Independence iBOT Mobility System — a powered wheelchair that lets users navigate stairs and live a more normal life — to gain CMS coverage after FDA approval. Such unacceptably long waits motivated the Trump administration to grant temporary automatic coverage for up to four years for breakthrough medical devices.
Unfortunately, after entering office, the Biden-Harris administration almost immediately repealed this rule, and two years later issued its own narrower pathway, mirroring the poorly executed Coverage with Evidence Development program. Unlike the Trump administration’s policy, the Biden-Harris pathway accepts only five devices annually. Despite issuing the proposal over a year ago, the administration only finalized it this month, demonstrating the low priority it places on innovation. y
CMS got it right on the first try. Now Congress must pass legislation reinstating the Trump rule, so that patients can access novel medical technology.
At a time when cancer deaths in adults cost more than $94 billion in lost earnings, and the direct cost of diabetes care exceeds $306 billion, promoting life sciences innovation is an economic imperative. Innovation is also a moral imperative. The human cost is real, as every patient is someone’s spouse, child or friend.
Joe Grogan is a nonresident senior scholar at the USC Schaeffer Center and served as director of the Domestic Policy for former President Trump. He consults for pharmaceutical companies.
Dr. Brian J. Miller is a nonresident fellow at the American Enterprise Institute and an assistant professor of medicine at the Johns Hopkins University School of Medicine.
