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Insurers are Rebelling Against the FDA’s Most Controversial 2016 Drug Approval

Sarepta Therapeutics New Global HeadquartersSarepta Therapeutics New Global Headquarters
Children suffering from the rare disease Duchenne muscular dystrophy at Sarepta's headquarters.Photograph by Boston Globe—via Getty Images

Sarepta Therapeutics (SRPT) won one of the most controversial drug approvals in recent memory for its rare disease therapy Exondys 51, meant to treat a serious muscle-wasting disorder. But that decision has pitted patient advocates, regulatory officials, and the organizations charged with paying for such treatments against each other—and the conflict seems like it’s going to persist, according to a new survey.

Sarepta’s drug hasn’t really demonstrated impressive effectiveness, as we’ve previously reported. But, before Exondys 51’s approval, there weren’t any cleared therapies for Duchenne at all. And a concerted effort to get even a nominal treatment past the regulatory finish line ultimately succeeded in convincing FDA bigwigs.

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But the drug’s marketing approval came with some unique caveats, essentially admitting that the medicine still needs to prove its efficacy. And that’s been anathema to major insurers like Anthem (ANTM), which still aren’t convinced that the pricey therapy is worth the risk.

In fact, a new note from Jeffries analyst Gena Wang finds that a whole lot of other benefits managers and insurers aren’t interested in being guinea pigs for an unproven drug. “Based on available data, 3/5 national and 8/15 regional managed care organizations (MCOs) have denied/restricted coverage for Exondys 51, in line with our expectation of pushback from private payers,” she wrote.

“Our analysis suggests likely slow uptake of Exondys 51 due to additional time required for genetic tests, uncertainty of clinical benefits, and exhaustive payer oversight; decisions to continue would likely depend on close monitoring of clinical benefits, safety and patient interest,” Wang continued.

Rare disease advocates tend to counter that even marginally effective treatments should be made available to patients who have unmet needs.