Three Ways ‘Right-to-Try’ Will Impact Managed Care Organizations

June 25, 2018
Karen Appold
Karen Appold

The law opens up new options for terminally ill patients. But how will it impact managed care organizations?

On May 30, President Trump signed “Right-to-Try” legislation that will allow certain drugs to be administered to terminally ill patients who have exhausted all FDA-approved treatment options and aren’t able to participate in clinical drug trials. Patients will no longer need to receive approval from the FDA to access the medications (as they did under the FDA’s Expanded Access Program). More than 1 million Americans die from a terminal illness every year. Eligible drugs must have undergone the FDA’s phase 1 of safety testing. Here’s a look at how the law could impact managed care organizations (MCOs).

1. MCOs might not have to pay for the medications. Craig Smith, JD, a partner in the health practice group at the law firm Hogan Lovells, expects that in most cases pharmaceutical companies will not charge for medications made available under the law. “Therefore, neither the patient nor the payer is likely to incur direct costs for these investigational drugs,” Smith says.

Secondly, if an investigational drug made available under the act improves a patient’s medical condition, this could result in reduced costs for the patient’s future care, which would benefit MCOs financially, Smith says.

2. MCOs might face higher costs due to problems associated with the medications. Because drugs used under this law wouldn’t be FDA approved, their safety and effectiveness have not been completely established. “Patients who are treated under this act may suffer worse outcomes than if they were treated with conventional therapies or didn’t have any additional treatment,” Smith says. “Patients could also suffer severe side effects.” In these cases, Smith anticipates that patients may need access to more healthcare products and services, which could lead to higher costs for MCOs.

Gail Javitt, JD, MPH, a member of Epstein Becker Green’s health care and life sciences practice, also points out that while the act prohibits a drug sponsor from paying the certifying physician, it does not restrict the certifying physician from charging the patient for the investigational therapy or for the process of obtaining it.

3. The extent of the impact on MCOs is unclear because it remains to be seen how much patient access to investigational drugs will change. Forty states have already passed Right-to-Try laws. “But the states’ laws have had limited impact because they did not supersede federal law, which continued to require FDA authorization of any patient access to unapproved drugs,” says Robert Church, JD, a partner in the FDA practice at the law firm Hogan Lovells. “However, the new federal law explicitly changes FDA’s authority in this regard. Therefore, I expect that the new law will have a substantial impact on patients’ access to investigational therapies.”

However, Javitt sees things differently. “The drug sponsor (typically a pharmaceutical manufacturer) will need to be willing to provide the drug,” she says. “But there isn’t any legal obligation for a drug company to do this, nor can the FDA compel a company to do so.” A company may decide not to provide an investigational drug to someone who isn’t enrolled in a clinical trial in order to ensure that sufficient quantities will be available to complete clinical investigations or for other reasons.

Karen Appold is a medical writer in Lehigh Valley, Pennsylvania.