Ann: Ryoncil Pricing Set and Available This Quarter, page-552

I asked AI more around the legal obligations of insurers to cover new biologic/drug treatments (devices are different, so ppl need to be careful).

I posted this on Friday but I think may be worth reposting given the current discussions. We really think need to think about:
1. Are they all obligated to provide an FDA approved treatment which has no approved therapies for the approved indication and is life threatening? Are there types of cover which are just too basic to allow for more exotic/expensive treatments?
2. How long can they drag out negotiations once comprehensive clinical and economic data has been provided?
3. Can the insurance company be back charged if Mesoblast provide the treatment for free pending a guaranteed legal obligation for coverage? Why should mesoblast be providing free treatments under compassionate use when the product is not fully approved?

Obligating Health Insurers to Cover an FDA-Approved Treatment Before Pricing Is Negotiated

The ability to force an insurer to cover a newly FDA-approved treatment before pricing is set depends on the type of insurance and applicable laws. Here’s a breakdown by insurance category:

1. Private Health Insurance (Employer-Sponsored & Marketplace Plans)

✅ Possible, but challenging

• Private insurers typically determine coverage through medical policies and formularies that assess clinical effectiveness and cost.
• Even if a treatment is FDA-approved, insurers may wait for pricing negotiations before deciding coverage.
• State laws may require quicker coverage for FDA-approved treatments, especially in cancer or rare disease cases.

Options for Patients & Providers

✔ Medical Exception or Appeal – A doctor can argue medical necessity to request early coverage.
✔ State-Level Insurance Commissioner Complaint – If state law mandates coverage, regulators can intervene.
✔ Employer Pressure – If an employer sponsors the plan, they may negotiate coverage directly.

2. Medicare (Traditional & Advantage Plans)

✅ Limited, but possible

• Medicare Part B (doctor-administered drugs) & Part D (prescription drugs) follow CMS reimbursement determinations, which take time after FDA approval.
• National Coverage Determinations (NCDs) and Local Coverage Determinations (LCDs) influence whether Medicare pays early.

Options for Patients & Providers

✔ Compassionate Use / Expanded Access Programs – Some drugs may be available via patient assistance programs.
✔ Administrative Appeals – If a doctor proves medical necessity, Medicare may approve individual cases.
✔ Congressional or Legal Pressure – In high-profile cases, policymakers may push for faster Medicare coverage.

3. Medicaid (State-Run Programs)

✅ More likely due to federal mandates

• Medicaid must cover FDA-approved drugs that participate in the Medicaid Drug Rebate Program (MDRP).
• However, states can implement prior authorization requirements before formal pricing is set.

Options for Patients & Providers

✔ Medicaid Fair Hearing Request – Patients can challenge denials through a state appeals process.
✔ Legal Challenges – In cases where a state Medicaid program delays access, legal action may force coverage.

4. ACA Plans & Essential Health Benefits

✅ Depends on state mandates & plan policies

• ACA marketplace plans must cover essential health benefits, but they have discretion over which new treatments to include.
• Some states require insurers to cover new FDA-approved treatments faster than federal rules dictate.

Options for Patients & Providers

✔ State Insurance Commissioner Complaint – If state law supports coverage, regulators can intervene.
✔ Expedited Review Requests – Insurers may approve case-by-case exceptions.

Bottom Line

It is possible to push an insurer to cover an FDA-approved treatment before pricing is finalized, but it depends on the type of insurance, applicable laws, and medical necessity arguments.