MERCI

Medicaid Evidence and Review of Cost Initiative (MERCI)

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The Center for Evidence-based Policy (Center) created the Medicaid Evidence and Review of Cost Initiative (MERCI) to analyze drugs approved using the US Food and Drug Administration’s (FDA) accelerated approval pathway or specialty designations and inform budget and policy decisions by state and federal policymakers. The MERCI project will analyze accelerated approval drugs and issue a series of policy briefs including information and evidence about:

  • The estimated prevalence of target diagnoses (the accelerated approval drug’s indication[s]) within states’ Medicaid populations; 
  • The clinical trial population used to support FDA approval, and how similar it is to the Medicaid members overall; and 
  • Projected drug costs for state Medicaid programs, including a breakdown of state and federal funds using the Federal Medical Assistance Percentage (FMAP). 

MERCI analyses include directly relevant national and state-level data where available.

Medicaid Background

In September 2023, 88 million people were enrolled in Medicaid in the US, covering 26% of the country’s population.[1] While state Medicaid programs are responsible for covering costs and generating health outcomes for a quarter of the US population, they do not have a role or any formal influence in the FDA review and decision-making process for new drugs brought to market. State Medicaid programs are, however, required to pay for FDA-approved drugs per the requirements of the Medicaid Drug Rebate Program (MDRP)[2].

Congress created the authorizing legislation for the FDA’s Accelerated Approval Program to encourage drug manufacturers to put resources into research and development of treatments for serious and often rare diseases to try to fulfill unmet clinical needs. This drug approval pathway allows for faster approval of such drugs by allowing surrogate endpoints to be submitted in lieu of direct measures of clinical benefit. Many therapies approved using this accelerated pathway are fully available in the US marketplace and covered by state Medicaid programs, as mandated by Federal MDRP regulations, often at extremely high cost and without robust evidence of meaningful clinical benefit to the patient.

MERCI Accelerated Approval Drug Briefs

Brief 1: Voxelotor (Oxbryta) for Sickle Cell Disease

In 2019, the US Food and Drug Administration (FDA) gave voxelotor accelerated approval as a treatment for sickle cell disease (SCD). SCD is a serious, inherited, painful, multisystem, and chronic blood disorder that affects around 100,000 individuals in the US, with more than half of those individuals (52,524) enrolled in Medicaid.

Voxelotor was given accelerated approval based on a surrogate outcome of increases in hemoglobin. The FDA requested complete results of 2 confirmatory trials, and in September 2024 the manufacturer voluntarily withdrew the drug from the market, noting that postmarket trials showed that the benefits of voxelotor did not outweigh the risks. The uptake rates of voxelotor in Medicaid are estimated at less than 10%, yet according to our analysis, Medicaid spent more than $100 million on voxelotor for SCD treatment in 2020 and 2021 combined.

Brief 2: Exon-Skipping Pharmaceutical Treatments for Duchenne Muscular Dystrophy

Between 2016 and 2021, the US Food and Drug Administration (FDA) gave accelerated approval to 4 exon-skipping pharmaceutical treatments for Duchenne muscular dystrophy (DMD): eteplirsen (Exondys 51), golodirsen (Vyondys 53), viltolarsen (Viltepso), and casimersen (Amondys 45). DMD is a rare genetic condition characterized by progressive loss of muscle function due to mutations in the dystrophin gene. In our analysis of 81 million members enrolled in Medicaid in 2021, we identified 6,041 as having DMD.

All 4 exon-skipping therapies were approved via the FDA’s accelerated approval pathway, primarily based on small increases in dystrophin levels in biopsied muscle tissue, a surrogate endpoint of DMD progression. Our analysis estimated that total 2021 Medicaid spending nationally on exon-skipping treatments was $252.1 million (excluding spending in 3 states for which we do not have data), with $171.2 million coming from federal funds and $80.8 million from state funds.

Brief 3: Sotorasib (Lumakras) for Non-Small Cell Lung Cancer

In 2021, US Food and Drug Administration (FDA) gave sotorasib (branded as Lumakras) accelerated approval as a treatment for non–small cell lung cancer (NSCLC) when the tumors test positive for the KRAS G12C mutation. Lung cancer is the third most common cancer type in the US and the leading cause of cancer-related deaths in US.

Sotorasib, a molecularly targeted therapy, was given accelerated approval using surrogate clinical endpoints for overall response rate and duration of response. In 2023, the FDA reviewed results of the manufacturer’s confirmatory trial and voted against full drug approval for sotorasib. Instead, the FDA issued a complete response letter allowing the manufacturer to conduct another confirmatory trial to be completed no later than February 2028. This decision extends the accelerated approval window to more than 6 years, during which time we estimate that Medicaid may spend approximately $140 million (or $23.1 million per year, assuming no change in the uptake rate) on patient therapy with sotorasib.

Brief 4: Impact of FDA Accelerated Approval on Medicaid

The Impact of FDA Accelerated Approval on Medicaid brief identifies specific opportunities to enhance Medicaid coverage of FDA accelerated approval drugs while taking needed and appropriate steps to protect people made vulnerable by serious and life-threatening disease. Building on findings from the individual MERCI drug analyses, this brief describes policy enhancements to create better access to confirmatory trial information and permit state Medicaid programs to craft policies that use evidence effectively when uncertainty exists.

MERCI Brief 4: Impact of FDA Accelerated Approval on Medicaid

Brief 5: Tisotumab Vedotin-tftv (Tivdak) for Cervical Cancer

In 2021, the US Food and Drug Administration (FDA) gave tisotumab vedotin-tftv (branded as Tivdak) accelerated approval for the treatment of recurrent or metastatic cervical cancer. In 2024, the drug manufacturer submitted confirmatory trial results requested by the FDA and received traditional drug approval for tisotumabvedotin‑tftv.

Cervical cancer has the fourth highest mortality rate among cancers in women, and according to our analysis, nearly 6,000 female Medicaid members aged 18 to 64 were identified as having recurrent or metastatic cervical cancer in 2021. It is estimated that Medicaid will spend approximately $53.9 million total for treatment with tisotumab vedotin- tftv each year, with $37.6 million coming from federal funds and $16.3 million from state funds. Notably, the drug carries a black box warning for vision loss and a recent cost-effectiveness analysis demonstrated that tisotumab vedotin-tftv is likely not cost-effective compared with chemotherapy for recurrent or metastatic cervical cancer.

Brief 6: Hydroxyprogesterone Caproate (Makena) for Reducing the Risk of Preterm Birth

 In 2011, the US Food and Drug Administration (FDA) gave hydroxyprogesterone caproate (HPC; branded as Makena), accelerated approval to reduce the risk of preterm birth in women with a singleton pregnancy who have a history of spontaneous preterm birth. Preterm birth is a birth that occurs before 37 weeks of gestation. Preterm birth is the most common cause of infant death and is the leading cause of long-term disability in children.

When the confirma­tory study requested by the FDA for Makena did not verify clinical benefit and the FDA recommended that the drug be withdrawn from market, the manufacturer contested the recommenda­tion. The review and appeals process kept the Makena on the market for more than 3 years after the publication of evidence showing no clinical benefit. As Medicaid is required to cover all FDA-approved drugs, even those for which the FDA has recommended withdrawal, we estimate that more than 60,000 Medicaid members took hydroxyprogesterone caproate but received no clinical benefit during the 3-year review and appeals process.

Brief 7: Deferiprone (Ferriprox) for Transfusional Iron Overload

In 2011, the US Food and Drug Administration (FDA) granted deferiprone (branded as Ferriprox) accelerated approval as a treatment for transfu­sional iron overload. A rare and potentially fatal condition, transfusional iron overload develops in individuals who receive repeated blood trans­fusions to treat certain causes of low red blood cell count, including thalassemia syndromes and sickle cell disease.

Distributed through a specialty pharmacy, deferiprone was granted accelerated approval based on a blood biomarker as a surrogate clinical endpoint. As a provision of the 2011 accelerated approval, the FDA required the completion by 2016 of a confir­matory trial to verify and describe clinical benefit of deferiprone. The trial was completed in 2019 and the manufacturer submitted final reports to the FDA in 2020. In 2021, FDA converted the drug to traditional approval using results from a noninferiority trial design, meaning the study only demonstrated that the drug is not any less effective than an existing therapy. The drug has a black box warning for serious infection and death.

Based on our analysis of Centers for Medicare & Medicaid Services (CMS) Transformed Medicaid Statistical Information System (T-MSIS) data, Medicaid spent $106.9 million to cover deferiprone for 429 Med­icaid members from 2019 through 2021.

[1] Centers for Medicare & Medicaid Services. September 2023 Medicaid and CHIP Enrollment Trends Snapshot. https://www.medicaid.gov/media/168221. Accessed January 16, 2023.

[2] (SSA § 1927(d))