Quarter 2 Ryoncil revenue projections, page-163

Hi Reg,

I'm not 100% sure why I got tagged there, but it's an interesting issue nonetheless.

Re " What is the law that governs insurers having to fulfil their policy commitments?", well how much time do we have?

I understand what was niggling at you was the thought that if a given USA healthcare insurer was "required by law to pay for the therapy " then market penetration should follow, as a matter of course. Well sure. But it's complicated. The primary complication is that insurance policies start life as a matter of contract, and then - in order to enter particular sections of the marketplace e.g. union-controlled employment sectors or Federal government-backed sectors for those who don't meet income thresholds (or satisfy other social contract tests) or to get a licence from groups like Blue Care who design healthcare insurance plans & then licence plan terms out to industry providers - the private sector has to agree to comply with coverage conditions. Those conditions have the force of law, altho' not negotiated between the insured and the insurer (payer). That's how a 'required by law' condition might be imposed, if not already simply agreed as a matter of contract under the terms of a particular insurance plan.

As a general principle, one could profitably chew on this one IMO: if the Federal bodies charged with protecting those unable to negotiate,e.g. the poor or socially disadvantaged, decide to agree to provide converage under the Medicare National Drug Program for a particular indication in, say, cell therapy, because the drug (biologic) manufacturer has signed up to the Medicaid National Drug Rebate Agreement, as MSB has done, then other private (mutual fund or arms length membership) insurance providers will have to go along and cover the same indication simply because the State's (variously) will then fund that cell therapy and set the lowest common denominator. Simply put, a private insurer refusing to provide coverage for a treatment that the Federal government is prepared to fund coverage for (via State-based health programs) will lose market share. And so that part of its market will 'die'. It's not a mere coincidence IMO that Mesoblast has signed up to the Medicaid National Drug Rebate Agreement - Americans might view this as a brilliant "end run" (US gridiron term of art) in the context of drug commercialization.

And here's a good article on the Federal/ State healthcare law interaction through Medicaid with corresponding requisite insurance contracted out by the States (Linkhere).

Bad news is you'll need to read it. Good news is that I've extracted a section that I think addresses your concern in some detail:

" .... Since gene and cell therapies are potentially curative and intended for one-time administration, payment for the therapies exists as an up-front payment at time of administration. This differs from therapeutics used for symptom and disease management that are administered over a lifetime for conditions that have no disease-modifying alternative and are reimbursed following each administration. Therefore, gene therapies that hold a high price tag that in many cases will rival that current total lifetime care cost create a logistical and budgetary hurdle for state Medicaid programs, especially as the eligible populations for these treatments grow. State budgeting processes can occur sometimes 2 years out in advance of emerging FDA approvals, and state budgets must be balanced each year. This combined with other fiscal pressures—such as pandemic response, rising education costs, and infrastructure—make it especially difficult to accommodate these costs, even if the costs are recouped over a patient’s lifetime.

Federal law sets overarching requirements for state Medicaid programs, which mandate coverage of certain medical benefits. However, the bulk of the operational decisions are left at the discretion of each state, including enrollment eligibility, reimbursement methodology, and service coverage. Once approved by the Centers for Medicare and Medicaid Services (CMS), state Medicaid programs may draw down federal funds based on the federal medical assistance percentage (FMAP). Under the Medicaid Drug Rebate Program (MDRP), states that include prescription drug coverage in their Medicaid programs—which all states do—must cover all drugs approved by the Federal Drug Administration (with limited statutory exceptions) according to their “medically accepted indications,” and in return manufacturers provide rebates on their products to the states, which are then shared between the states and the federal government.

Under Section 1927 of the Social Security Act (SSA), which authorizes the MDRP, the “medically accepted indication” is defined as “any (emphasis added) use of a covered outpatient drug which is approved under the Federal Food Drug And Cosmetic Act (FFDCA), or the use of which is supported by one or more citations included or approved for inclusion in any of the compendia described in section 1927(g) (1) (B) (i),” which include the American Hospital Formulary Service Drug Information, United States Pharmacopeia-Drug Information (or its successor publications), and the DRUGDEX Information System. This means the drugs administered under the MDRP, whether by states directly or by Medicaid Managed Care Organizations (MCOs) contracted by the states to administer and run their benefit, are required by federal law to be covered for FDA-approved “indications and usage” (referred to hereafter as the “labeled indication”).

Despite general coverage to the labeled indication being mandated by federal law, variations in state plans, policies, and practices have created anecdotal inconsistencies regarding how therapies are covered, which populations they cover, and how quickly coverage is approved for individual patients. This leads to patient access issues, as denials or delays in coverage lead to delays in treatment. These disparities and delays all culminate into an unsustainable public payor system that undermines Medicaid’s objectives to improve the care and health of its beneficiaries... "

And here's the snapper in the article. The feature that a number of posters have commented on i.e. a requirement to have failed previous lines of therapy consistent with the indications and usage section of a label, is considered by the authors to be a proper payor requirement in accordance with the labeled indication. So, on the one hand RYONCIL is not yet listed in the NCCN guidelines for GVHD. Yet RYONCIL is the only FDA-approved treatment for the pediatric condition. What is a clinician to do? The fight continues.

So, we come back to this - a clinician has to make a decision. And has to be prepared to sign in writing that nothing else will help. Once the clinician does so, it will be borderline impossible since July1, IMO for a USA insurer in every State to resist coverage for the pedatric SR-aGVHD condition, provided the patient's plan conditions make the particular specialist drug coverage required for biologics like CAR-T and RYONCIL part of the provided cover.

Just my opinion. Not advice, you understand.

Cheers
GLTALTH