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

[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))