Provenge: The Straw That Broke Medicare Part B's Back?

'Unbelievable Disconnect' Continues for Now

Nick Mulcahy

April 19, 2011

April 19, 2011 — The days when the Centers for Medicare and Medicaid Services (CMS) cannot negotiate payment with drug makers over pricey drugs in Medicare Part B, especially cancer drugs, will come to an end, predict a pair of health policy experts in an essay published online April 6 in the New England Journal of Medicine.

And a great catalyst to this reform and its "inescapability" will have been the prostate cancer vaccine sipuleucel-T (Provenge; Dendreon), say James Chambers, MPharm, and Peter Neumann, ScD, from the Center for the Evaluation of Value and Risk in Health at Tufts Medical Center in Boston, Massachusetts.

"From a health policy standpoint, [Provenge's] lasting legacy may be its role in accelerating overdue payment reforms," they write.

The case of Provenge is a "turning point," say the authors. It has highlighted the "inflexibility of existing payment rules" that allow the CMS "little leeway to contest or otherwise address manufacturers' stated prices."

"CMS's review for Provenge brought the issue of costly new anticancer treatments into sharp focus," Mr. Chambers told Medscape Medical News.

Part B, which typically involves drugs that are injectables or infused, is where most of the "inflexibility" and inability to "contest" prices is, suggest the essayists. (Under Medicare Part D, which typically involves oral drugs, private plans associated with the CMS can negotiate lower drug prices.)

Why is Provenge the turning point and not one of the other expensive therapies that Medicare Part B has agreed to pay for in recent years?

One of the reasons is timing. The United States is in a period of heightened budget consciousness. "Sipuleucel-T's anticipated impact on the budget seemed to be the factor in the decision to undertake the review [of Provenge by the CMS]," write the essayists, who explain that the CMS does not routinely review and vote on efficacy and safety data as it did with Provenge.

Another reason is the vaccine's cost, suggest the essayists. Provenge is "one of the most expensive cancer therapies ever to hit the market," they write about the vaccine, which increases survival in metastatic prostate cancer by an average of 4.1 months, compared with placebo, at the cost of $93,000 for a typical course of 3 treatments.

Yet another reason that Provenge represents a turning point is the commonness of prostate cancer, suggested Mr. Chambers.

The example of ipilimumab (Yervoy; Bristol Myers Squibb) helps illustrate this point. The recently approved treatment for metastatic melanoma could conceivably be a candidate for a review by the CMS, similar to what Provenge underwent, because ipilimumab is "likely a Part B drug," said Mr. Chambers. It also might even be more expensive than Provenge, costing a reported $120,000 per 4-dose treatment.

However, metastatic melanoma is not a common disease. "If the number of eligible beneficiaries for ipilimumab was relatively small, CMS might not consider it" for a tougher review, said Mr. Chambers.

Regardless of the exact turning point and the specific drug associated with it, the way that Medicare Part B operates needs fixing, conclude the authors.

That's not news to critics of the way drugs are reviewed, approved, and paid for by the federal agencies in the United States. The overall system is part of an "unbelievable disconnect in our government" Leonard Saltz, MD, from Memorial-Sloan Kettering Cancer Center in New York City, previously told Medscape Medical News.

"The FDA [US Food and Drug Administration] is mandated to ignore costs and the Centers for Medicare and Medicaid Services is mandated to pay for drugs and is forbidden to negotiate cost," explained Dr. Saltz.

Departure From Usual Policy

Moving forward, coverage decisions of "expensive emerging technologies" by the CMS "promise to be complex and perhaps contentious affairs," write Mr. Chambers and Dr. Neumann. That's because the CMS will be "unable to absorb the costs of all high-priced technologies," they say.

However, until Medicare payment is reformed, CMS will have to resort to its only currently available weapon of fiscal responsibility — taking an "aggressive stance toward the clinical data" — as was done in the case of Provenge, the authors write.

In the case of Provenge, the CMS enacted a "national coverage" analysis and rereviewed the same efficacy and safety data that the FDA had previously examined. This was a "departure from longstanding CMS policy" say the essayists.

"The CMS has generally not reviewed the same questions about scientific evidence that the FDA has considered, and it has seldom considered cancer therapies through its national coverage analysis process," they write.

In their essay, Mr. Chambers and Dr. Neumann discuss how Provenge might have had a more efficient "parallel review" by the CMS and the FDA.

Tough Review But Harsh Outcome Unlikely

A final decision on whether or not the CMS will cover the cost of Provenge will be forthcoming at the end of June.

The signs look good for the company.

On March 30, the CMS issued a "proposed decision" memo for Provenge, saying that it will allow national coverage in keeping with the FDA indication (for the treatment of asymptomatic or minimally symptomatic castration-resistant metastatic prostate cancer). Also, importantly, in the memo, CMS "did not deny or restrict coverage in the off-label population but left the matter to regional contractors," write Mr. Chambers and Dr. Neumann.

This latter decision is especially notable because, in its review, CMS's Medicare Evidence Development and Coverage Advisory Committee gave the quality of evidence supporting the vaccine a 3.6 rating (of a possible 5) for its FDA on-label use, which was widely interpreted as a middling vote of confidence, but only a 1.2 rating for off-label use, which was not seen as a ringing endorsement.

Despite having received unusual scrutiny from the CMS and having been dogged by efficacy concerns about Provenge, Dendreon may ultimately fair well under existing Plan B coverage. In the end, there will have been no CMS negotiation with Dendreon about the price of Provenge; CMS will be paying the manufacturer's stated price, and off-label use might even be covered.

Dr. Neumann reports being a member of the advisory boards on health economics topics of Pfizer, Johnson and Johnson, Merck, and Takeda; and receiving research grants from Genentech, Janssen, and Novartis.

N Engl J Med. Published online April 6, 2011. Full text

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