Reimbursement (Feb 2011)Once Provenge was finally approved, the...

Reimbursement (Feb 2011)

Once Provenge was finally approved, the story turned to whether insurers would reimburse its $93,000 sticker price. This story was given a great deal of juice by the Center for Medicare and Medicaid Services (aka CMS) opening a National Coverage Assessment (shortened to NCA) to ?determine? whether Provenge would be covered. Many thousands of words were written about this determination by the media.

What hasn?t been written is how three key developments in January materially changed this story.

First, Dendreon announced private insurers have made positive coverage determinations covering 80% of potential patients. Private insurers, unlike CMS, are under no Congressional mandate to cover FDA-approved drugs. The fact enough of them have agreed to cover the drug for on-label use to cover 80% of insured American men is a good sign CMS will too.

Second, it?s a little known fact private companies administer Medicare and Medicaid under contract by the US government. These private insurers make their own coverage determinations according to rules set by Congress. CMS can override these ?local? coverage determinations through the NCA process.

At the time of the CMS panel on Provenge in November, 14 of 15 local subcontractors had already decided to cover Provenge. A couple of weeks ago, so did the fifteenth. Their coverage inclusions and exclusions mirror the FDA-approval label and entry criteria for the pivotal trial. The result is the reimbursement of Provenge with no unexpected restrictions.
That brings us to our third key development. The patient advocacy group Care To Live has been very active on the Provenge story on behalf of men with prostate cancer. Shortly after CMS announced the NCA, Care To Live filed a Freedom of Information Act (FOIA) request to find out why.

The ?why? of the NCA isn?t an idle question. Some on Wall Street decided maybe it was a problem with Provenge data -- an extension of their failed view that the Provenge data are somehow flawed. The media thought it was because of the ?high price? of Provenge. Regulatory insiders suggested the issue was merely confusion about what Provenge was -- drug or a discrete series of already covered procedures.

Care To Live?s FOIA answered this. In the 15 pages of documents, there was never a question of whether the drug worked or its price being too high. There were questions, largely from that fifteenth subcontractor, about whether Provenge was a new drug or simply a collection of existing procedures.

Bottom Line on Reimbursement

All 15 CMS subcontractors are covering Provenge. The whole question of CMS coverage had nothing to do with the data or efficacy of Provenge. It was confusion on the part of some local contractors about whether it was a new drug or compilation of existing procedures. The subcontractor who asked this question the loudest decided their questions were sufficiently answered by last November?s panel and decided in favor of full, on-label coverage for Provenge.