Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa Bay news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Charlotte news in your inbox

Catch up on the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Rebecca Zisser/Axios

Pharmaceutical companies can often begin raking in huge profits before they've proven that a new drug will work. And some of them don't work.

The big picture: The FDA is increasingly allowing drugmakers to start selling their products based on preliminary evidence, wrapping up their clinical trials after they’re already on the market. Some of those trials don’t pan out — but drugmakers are still charging sky-high prices in the interim.

Driving the news: Eli Lilly said yesterday that it will pull the cancer drug Lartruvo off the market, after a clinical trial showed that the drug didn’t extend patients’ lives.

  • The FDA first signed off on Lartruvo in 2016, using a special regulatory pathway that allowed it to rely on the results of a small clinical trial.
  • The drug pulled in roughly $500 million in sales over the intervening 2 years.

Between the lines: Over the past few years, the FDA has been moving significantly more drugs through its "accelerated approval" process.

  • That trend is controversial on its own: The expedited process was initially a response to critics who said the FDA was moving too slowly on life-saving treatments. But now other critics now worry the agency is overcorrecting, putting drugs in patients’ hands that may end up being unsafe or ineffective.
  • Many accelerated-approval drugs launch with sky-high prices, even though they're not yet fully proven.

“If it turns out the drug doesn't work in the end, nobody gets their money back," said Walid Gellad, a professor at the University of Pittsburg who studies the drug industry.

So far, that hasn't happened often. Lartruvo was only the second time in recent memory that an accelerated approval ended up going bust.

  • But the sharp jump in accelerated approvals is relatively recent; many of those drugs simply haven't finished their fuller clinical trials yet.
  • Prices are also rising. Gellad cited several big-ticket drugs approved through the faster pathway, including Exondys 51, which treats a rare muscular disorder. It came onto the market based on a clinical trial of just 12 people — with price of roughly $300,000 per year.

The federal government disproportionately reaps both the costs and rewards of accelerated approval, Gellad explained in a recent paper.

  • Private insurance plans can choose which drugs they'll cover, and can exclude drugs that haven't met the FDA's standards for full approval. That can deny patients early access to drugs that ultimately turn out to be life-savers; it can also spare them the cost of drugs that don't.
  • By law, though, Medicare and Medicaid have to cover almost every FDA-approved drug, and have only a limited ability to steer patients toward cheaper alternatives. (The Trump administration is trying to loosen those restrictions.)

Gellad has suggested a preliminary pricing structure to go along with preliminary approval.

  • The government could say, for example, that it will only cover manufacturing costs "plus some agreed-on markup” for accelerated-approval drugs.
  • That would give drugmakers an incentive to promptly follow through on the rest of their clinical trials and convert to a full FDA approval, he argues.

"If you look at it in the lens of paying for value: If there's no proof the drug has value, then why should we pay the same as if the drug had proof of value?” he asked.

Go deeper

3 hours ago - Politics & Policy

Trump to issue at least 100 pardons and commutations before leaving office

Photo: Mandel Ngan/AFP via Getty Images

President Trump plans to issue at least 100 pardons and commutations on his final full day in office Tuesday, sources familiar with the matter told Axios.

Why it matters: This is a continuation of the president's controversial December spree that saw full pardons granted to more than two dozen people — including former Trump campaign chair Paul Manafort, longtime associate Roger Stone and Charles Kushner, the father of Trump's senior adviser and son-in-law, Jared Kushner.

  • The pardons set to be issued before Trump exits the White House will be a mix of criminal justice ones and pardons for people connected to the president, the sources said.
  • CNN first reported this news.

Go deeper: Convicts turn to D.C. fixers for Trump pardons

Schumer's m(aj)ority checklist

Senate Minority Leader Chuck Schumer. Photo: Tasos Katopodis/Getty Images

Capitalizing on the Georgia runoffs, achieving a 50-50 Senate and launching an impeachment trial are weighty to-dos for getting Joe Biden's administration up and running on Day One.

What to watch: A blend of ceremonies, hearings and legal timelines will come into play on Tuesday and Wednesday so Chuck Schumer can actually claim the Senate majority and propel the new president's agenda.

The dark new reality in Congress

National Guard troops keep watch at security fencing. Photo: Kent Nishimura/Los Angeles Times via Getty Images

This is how bad things are for elected officials and others working in a post-insurrection Congress:

  • Rep. Norma Torres (D-Calif.) said she had a panic attack while grocery shopping back home.
  • Rep. Jim McGovern (D-Mass.) said police may also have to be at his constituent meetings.
  • Rep. Adam Kinzinger (R-Ill.) told a podcaster he brought a gun to his office on Capitol Hill on Jan. 6 because he anticipated trouble with the proceedings that day.