Value-Based Coverage Decisions: CMS Scrutinizes Provenge

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Article
Oncology & Biotech NewsAugust 2011
Volume 5
Issue 8

In late March, CMS ended the speculation by announcing its intention to pay for onlabel uses of the drug, which costs $93,000 for a 3-dose regimen, while leaving off-label coverage decisions to its regional contractors.

value-based health coverage

As the Centers for Medicare & Medicaid Services (CMS) deliberated earlier this year over whether to cover Provenge (sipuleucel-T), an expensive but potentially gamechanging new treatment for prostate cancer, many in healthcare policy, patient advocacy, and oncology circles held their breath. Would the agency reject a cancer treatment approved by the FDA?

In late March, CMS ended the speculation by announcing its intention to pay for onlabel uses of the drug, which costs $93,000 for a 3-dose regimen, while leaving off-label coverage decisions to its regional contractors. More recently, the agency issued a final National Coverage Determination that requires Medicare contractors to cover Provenge’s use in treating asymptomatic or minimally symptomatic prostate cancer that has spread to other parts of the body and is resistant to standard hormone treatment.

Despite the outcome, CMS watchers called the controversial review significant, with possible implications for policy decisions down the road.

J. Leonard Lichtenfeld, MD

J. Leonard Lichtenfeld, MD

Is It the Cost?

J. Leonard Lichtenfeld, MD, deputy chief medical officer for the American Cancer Society, described it as “the preliminary round in a heavyweight match-up between Uncle Sam and the pharmaceutical companies.”

“One wonders why they went through the process if it were not about cost,” he said. “From a purely practical point of view, this was a straightforward decision. The drug had shown benefits, had the approval of the FDA, and so it would have flown in the face of decisions the agency had made previously to deny coverage.”

But he noted that the agency had already signaled its sensitivity to costs by refusing to pay for cancer tests.

Indeed, Lichtenfeld said that CMS “threw down the gauntlet” in 2009 in denying coverage of CT colonography for the detection of colorectal cancer. The agency made it clear following that decision, he said, that assessing the value of treatments and their impact on the Medicare budget were within the scope of reviews.

“The agency declared an aggressive public policy intended to put the brakes on approvals, and the decision was written in a way that suggested it was within their purview to ask [for] more details. I thought this time might be the time CMS would exercise that newfound authority,” he said, noting however that he agreed with the decision to cover on-label uses of Provenge.

One wonders why they went through the process if it were not about cost. From a purely practical point of view, this was a straightforward decision. The drug had shown benefits, had the approval of the FDA, and so it would have flown in the face of decisions the agency had made previously to deny coverage. ”

—J. Leonard Lichtenfeld, MD

“But I think we missed an opportunity to take on questions about off-label use,” he added. “I expected CMS to say ‘no’ to off-label use, except as part of clinical trials. That did surprise me.” Lichtenfeld commented on his blog that such an open-ended policy could subject the local carriers to a deluge of men “seeking this treatment for all the wrong reasons: very advanced symptomatic disease all the way to men newly diagnosed with their cancer, or whose cancer has spread but still responds to hormone treatment.”

While the decision ultimately backed existing healthcare policy, it infused uncertainty into the process that is unlikely to dissipate soon, said Allen S. Lichter, MD, chief executive officer of ASCO.

“I don’t know whether we’ll see this again or will get it with every single new cancer agent,” Lichter said, adding that such ambiguities in the approval process pose a threat to both care and research. “If you’re a drug developer, the possibility must be factored in as a risk of making the investment. It injects uncertainty no matter what you do, and this is the specter this process has raised.”

Allen S. Lichter, MD

Allen S. Lichter, MD

A Controversial Review

When CMS announced the review last year, ASCO urged the agency to withdraw from it on principle, noting a lack of “clarity regarding the purposes underlying this action” and asserting ASCO’s belief that the Social Security Act requires CMS to cover drugs and biologics for FDA-approved indications used in anticancer chemotherapeutic regimens.

“We understand that the cost of cancer therapeutics is increasing at a steady and relentless pace and that it can’t continue at that pace,” Lichter said. “But if you want to change the rules, you cannot use a single drug to have a discussion that needs to be held at a different level and a different place. We think CMS should always pay for FDA-approved agents.”

He added, “We would love to see a clear and strong statement from CMS that would reaffirm that on-label use of FDA-approved drugs is provided coverage. Do I expect we will see such an affirmative statement anytime soon? No. It is to their advantage to keep options open.”

Lichtenfeld, who also described the recent decision as “leaving us no clue about where we’re going on these issues,” said that future budget limitations might force the government’s hand.

“Expensive drugs in a budget-neutral situation impact how much is available to pay for other services,” he said. “Inevitably, as a society, we will be forced to make some cost decisions. When there is an absolute limit on the amount of money Medicare has and patients’ services are impacted, and when things become so tight that patients can’t get in the door, that’s when we’ll see restrictions.”

To date, Lichtenfeld added, the only place where costs are flexible is in Medicare Part B, the payments to physicians.

We understand that the cost of cancer therapeutics is increasing at a steady and relentless pace and that it can’t continue at that pace. But if you want to change the rules, you cannot use a single drug to have a discussion that needs to be held at a different level and a different place. ”

—Allen S. Lichter, MD

“There is no other place to go because we can’t negotiate with the companies that provide drugs. Doctors, coping with declining reimbursements, are already saying ‘no’ to Medicare patients,” he said, adding that it is patients, who pay 20% of the price of drugs, who are most impacted by rising costs.

Lichter said the practice of oncology has also been “tremendously affected.”

“The need for physicians to counsel patients financially, to intrude into the pure relationship is increasing,” he said. “In some cases, patients who cannot afford drugs don’t take them, and in others, they’re being sent from community practices to hospitals.”

And while there is still no clear basis in the law for government regulators to take costs into account, he added that “private insurers are wrestling with this all the time. With restrictions and prior approvals, the issue in the private insurance sector is the extent of coverage. It may not be as clear as simply refusing to pay.”

The Wrong Illness to Target

Anger and frustration over what some patients and investors saw as prolonged and opaque regulatory reviews of Provenge spilled over into politically charged protests.

“We thought the agency should have been clearer about what the review was for, and we questioned whether they should do a review at all on a late-stage cancer drug after FDA approval. Late-stage cancer is the wrong illness to target,” said Kerry M. Donahue, attorney for Care to Live, an advocacy group composed of patients, doctors, and investors that was formed in 2007 after the FDA initially withheld approval of Provenge, requiring additional trials.

Had CMS denied coverage, “there would have been thousands of people protesting in front of their offices,” he added.

Donahue said that it became clear early on in the process, however, that neither Congress nor the courts would insert themselves into the approvals process.

“We appealed to members of Congress to intervene after the FDA’s initial decision, citing a conflict of interest on the part of board members, but were told they couldn’t because it was an ongoing process,” he said. “We then took the complaint to US District Court for the Southern District of Ohio, which turned us down, and that decision was then affirmed on appeal.”

Donahue called the lengthy reviews by the FDA and CMS troubling, both from the standpoint of patients and the drug development process. “This was a small company that came up with something novel,” he said. “Having that investment in immunotherapy research is so important to cancer research.”

Lichter said the oncology community is not sitting on the sidelines as costs escalate, but is exploring various means to deliver treatments both effectively and efficiently.

“Pretending cost isn’t an important issue is not realistic,” he said. “When does a line get crossed? Is it $50,000 or $200,000? We need to take away taboos of talking about costs. Unless we say the budget is unlimited, at some point someone has to say ‘no’ to something.”

Lichter noted that ASCO formed a costof- care task force 3 years ago that includes representatives from a wide spectrum of stakeholder groups that are looking at ways to rationalize the process: to obtain needed drugs, to improve cancer treatment, and to keep costs in check.

He described the use of biomarkers to identify which patients are likely to respond to a drug so it is used more efficiently as another method, noting that “many new drugs are now coming out with companion biomarkers.”

Lichtenfeld said regulators also have additional tools at their disposal to control spending.

“We recognize that there are serious considerations about how to put resources to better use,” he said. “We felt on good authority, for example, that in the case of CT colonography, that CMS could have covered the tests with evidence and collected data that would have either validated the procedure or validated concerns. We thought this could have been a new paradigm and an innovative way to move forward.

“By carefully examining outcomes when there are significant coverage questions, such as how to use the medicine properly and most effectively, it’s beneficial to examine the reallife impact of treatments,” said Lichtenfeld. “We can do this if patients agree to be followed and monitored. We have learned from that experience.”

Tracey Regan is a freelance journalist.

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