Health Affairs

Health Affairs, 25, no. 5 (2006): 1260-1269 doi: 10.1377/hlthaff.25.5.1260 © 2006 by Project HOPE	New Online   Getting Health Reform Done   After the State of the Union   Incremental Reform   E-Health in Developing World   Most-Read Articles in 2009

This Article Abstract Reprint (PDF) Submit a response to this article Alert me when this article is cited Alert me when Comments are posted Alert me if a correction is posted Services E-mail this article to a friend Similar articles in this journal Similar articles in PubMed Alert me to new issues of the journal Add to My Personal Archive Download to Citation Manager Reprints & Permissions Citing Articles Citing Articles via HighWire Citing Articles via Web of Science (1) Citing Articles via Google Scholar Google Scholar Articles by Keenan, P. S. Articles by Phillips, K. A. Search for Related Content PubMed PubMed Citation Articles by Keenan, P. S. Articles by Phillips, K. A. Related Collections Access To Care Insurance Coverage Managed Care - Medicare Medicare Business Of Health Pharmaceuticals Research And Technology Health Spending Consumer Issues Insurance Market Evidence-Based Medicine

Coverage

Biotechnology And Medicare’s New Technology Policy: Lessons From Three Case Studies

Patricia Seliger Keenan, Peter J. Neumann and Kathryn A. Phillips

Abstract

 
Biotechnology has figured prominently in recent Medicare coverage and payment policies. Biotech treatments push policy boundaries for several reasons: They attract strong patient demand; they often treat rare or life-threatening diseases; they may have uncertain evidence of health benefits; and they are often costly. This paper considers case studies of Medicare coverage for off-label uses of biotech cancer drugs and payments for anemia biopharmaceuticals. The cases suggest Medicare’s ongoing challenge to balance access considerations, the role and strength of evidence, and cost consequences of new treatments.

To examine how biotech treatments are assimilated into evolving Medicare technology policy, this paper considers case studies of national coverage for off-label uses of biotech cancer drugs and payments for anemia biopharmaceuticals. To set the context, we briefly review Medicare coverage and payment policy for new technology. We then present case studies of biotechnology treatments, and we conclude with lessons regarding access, clinical evidence, and cost issues.

Overview Of Medicare’s New Technology Coverage And Payment Policy

Top Overview Of Medicare's New... Case Studies Of Biotechnology... Implications NOTES

 
Coverage policy. Congress has the authority to change Medicare benefit categories (for example, to add an outpatient prescription drug benefit), while the Centers for Medicare and Medicaid Services (CMS) makes decisions to approve new treatments within benefit categories (such as whether magnetic resonance imaging scans are covered along with x-rays). CMS decisions are based on the statutory requirement to cover treatments that are "reasonable and necessary" for diagnosis or treatment. Since the 1980s, repeated CMS efforts to use rule making to articulate criteria for determining what is "reasonable and necessary" have met with resistance over provisions on cost.³ The Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 required the CMS to use guidance documents to articulate coverage criteria. In a 2006 guidance document, the CMS indicated that cost-effectiveness and costs are not considerations in determining whether or not a treatment will be covered.⁴

In the absence of formal criteria, the CMS makes individual decisions using an "evidence-based" approach to evaluate whether a treatment’s health benefits outweigh its risks.⁵ The CMS often considers treatments with uncertain clinical evidence in the national coverage determination (NCD) process.⁶ Coverage decisions by the CMS (and private insurers) include treatments that have not been subject to review by the Food and Drug Administration (FDA), such as medical and surgical procedures and off-label uses of drugs. For example, pharmaceutical and biologic cancer drugs are often used "off label" for indications not approved by the FDA and have correspondingly less clinical evidence available.

Coverage policies typically include conditions that identify the patient populations and settings where a treatment is covered. In a few instances, Medicare has created requirements for additional evidence collection as a condition of coverage, an approach referred to as "coverage with evidence development" (CED).⁷

The CMS makes ten to twelve "national" coverage decisions per year. NCDs, the focus in this paper, apply uniformly across the country. The majority of Medi-care coverage determinations are made locally by private contractors that process Medicare claims, and they apply to limited geographic areas.

The NCD process begins when the CMS accepts an external request or internally initiates a review. Once a treatment enters this process, the CMS posts information about the pending review on its Web site and opens a thirty-day public comment period. During the review, the CMS conducts an internal assessment of clinical evidence and occasionally requests an external review of clinical evidence. The CMS posts a draft decision memorandum on its Web site and accepts public comments on the proposed determination. It then issues a final coverage determination that discusses the decision and public comments.

New technology hospital payments. Since the late 1990s, Congress has created policies to pay extra for new technologies in the inpatient and outpatient hospital payment systems. Recent hospital payment system changes aim to achieve a difficult balance by paying extra for new medical technologies within payment systems designed to hold down overall Medicare spending growth. For hospital outpa-tient payments, in 1999 Congress established a new technology "pass-through" payment for new drugs, biologics, and devices that input into an existing service and new technology ambulatory patient classifications (APCs) for new stand-alone services. Medicare pays for drugs under Part B when they are administered under the supervision of a physician in hospital outpatient and physician’s office settings. Congress made further changes to payments for Part B drugs in both settings in MMA.⁸ In 2000, Congress had created add-on payments for new treatments in the hospital inpatient setting; in 2003, in MMA, it made changes to broaden eligibility and expand opportunities for public input into these decisions.

Case Studies Of Biotechnology Coverage And Payments

Top Overview Of Medicare's New... Case Studies Of Biotechnology... Implications NOTES

 
We selected case studies of national coverage for off-label uses of biotech cancer drugs and hospital outpatient payments for anemia biopharmaceuticals. The case studies reflect important decisions in response to biopharmaceuticals that raise access, evidence, and cost considerations. We use letters from stakeholders, news articles, and CMS documents to examine how CMS policies respond in light of input from active participants in decisions.

Coverage of off-label uses of biotech cancer drugs. Off-label uses of colorectal cancer chemotherapies. The national coverage review of colorectal cancer chemotherapy drugs attracted policy and public interest because physicians often use cancer treatments off-label, and patients want the maximum flexibility in treating their potentially life-threatening illnesses.⁹

In February 2003 the CMS began a national coverage review of the colorectal cancer pharmaceutical Eloxatin (oxaliplatin). The CMS initially did not distinguish whether the review included FDA-approved or off-label uses and subsequently narrowed the review to off-label uses. Between February and May 2003, the CMS received letters from oncologists, elected officials, patient groups, and manufacturers, highlighting Eloxatin’s health benefits.¹⁰ Several groups specifically referred to concerns regarding a 2002 CMS Federal Register publication, in which the CMS indicated that it might consider whether an FDA-approved use of a drug or biologic was reasonable and necessary for coverage.¹¹ Groups such as the Cancer Leadership Council and the American Society of Clinical Oncology emphasized 1993 legislation that required Medicare to cover FDA-approved uses of cancer drugs. In May 2003 the CMS narrowed the review to off-label uses and added another pharmaceutical, Camptosar (irinotecan), to the review.

In September 2004 the CMS added two biopharmaceuticals, the monoclonal antibodies Avastin (bevacizumab) and Erbitux (cetuximab), to the review of colo-rectal cancer chemotherapies. Avastin is the first drug to treat cancer by blocking growth of blood vessels that feed cancer tumors. Erbitux inhibits tumor growth by interfering with a protein that regulates cell growth. Both drugs received FDA approval in February 2004.

The national coverage review raised multiple questions about safety and evidence for off-label uses. A New York Times article indicated that the CMS was concerned about side effects from using the drugs off-label for first-line therapy when they were approved to treat more advanced cancer.¹² Yet the CMS’s actions also prompted concern among physician-researchers, who warned that the CMS review could harm efforts to enroll patients in National Cancer Institute (NCI)–approved trials of additional uses of the drugs.¹³

The drugs are also costly to Medicare, with estimated total treatment costs for advanced colorectal cancer as high as $250,000 per person.¹⁴ Although limited information is available on the CMS’s perspective on treatment costs in this review, letters suggest that costs were a part of discussions in meetings between the CMS and the manufacturer of Eloxatin during the initial stages of the review in 2003.¹⁵

Following a nearly two-year review process, the CMS announced in a draft decision for public comment that Medicare would cover off-label uses of colorec-tal cancer chemotherapy drugs included in nine selected NCI-sponsored clinical trials and leave all other decisions on off-label uses to local contractors’ discretion. Comments from patient groups, medical societies, companies, and trade groups questioned how the trials were selected, the lack of opportunity to participate in CMS-NCI meetings, and how new clinical evidence from trials would be used in the future.¹⁶ Many asked the CMS to clarify that local coverage decisions (LCDs), which are seen as more flexible than NCDs, would be retained for all off-label uses not provided in trials, which the CMS affirmed in the final decision.¹⁷ Commenters also argued that this decision should not set a precedent for other decisions and questioned whether an individual NCD was the right mechanism to set a policy with potentially far-reaching consequences.

The colorectal cancer decision generated further debate on how the CMS determines evidence requirements as a condition of coverage. The CMS subsequently issued for public comment a draft guidance on factors in its use of CED; it received sixty-five comments on the guidance from patient groups; the American Medical Association (AMA) and specialty medical societies; individual manufacturers; and device, pharmaceutical, and biotech industry groups.¹⁸ In response, the CMS issued a fact sheet and indicated that it would issue an additional guidance with further opportunity for comment; the CMS released a revised guidance document a year later, in July 2006.¹⁹

Non-Hodgkins lymphoma radiopharmaceuticals. The CMS began its national coverage review of Zevalin (ibritumomab) in late July 2002. Zevalin, a radiopharmaceutical that uses a monoclonal antibody to deliver radiation treatment specifically to cancerous cells instead of to the entire body, was approved by the FDA on 19 February 2002 to treat follicular non-Hodgkins lymphoma. As with the colorectal cancer review, an initial question centered on the scope of the CMS’s review. Following discussions with industry and FDA officials, in August 2003 the CMS modified the review to focus only on off-label uses and to add another radiopharmaceutical, Bexxar (tositumomab), to the review.²⁰

During this national coverage review, a New York Times article indicated that "Medicare officials said cost was the program’s primary concern" in the review of Zevalin and Bexxar.²¹ Zevalin and Bexxar prices are in the range of $22,000 for a single dose, which is a full course of treatment.²² The group Patients Against Lym-phoma sent a letter to the CMS emphasizing its concern at the idea that the CMS would limit access because of cost and emphasizing the health harm and potential negative consequences for future innovation.²³ News articles and letters to the CMS conveyed cancer medical society and patient advocacy groups’ support for retaining access to the treatments.²⁴

After a nearly three-year review, the CMS ultimately decided to keep decisions on off-label uses of radiopharmaceuticals Zevalin and Bexxar at local contractor discretion.²⁵ Patient, provider, and industry groups expressed support for the decision, including the Lymphoma Research Foundation, the American College of Radiology, the Society for Nuclear Medicine, GlaxoSmithKline, and the Biotech-nology Industry Organization (BIO).²⁶ As noted, advocates of new technology often prefer LCDs to NCDs because they perceive the former as being more flexible. The decision reflects a trade-off between providing access to a promising treatment for a life-threatening disease where alternatives may be limited versus denying coverage in the face of uncertain and difficult-to-obtain clinical evidence.

Hospital outpatient new technology payments. Aranesp payment and functional equivalence. CMS payment policies for Aranesp (darbepoetin), an anti-anemia bio-pharmaceutical, involved competing manufacturers as well as cancer societies and elected officials. Aranesp received FDA approval in 2002, creating a competitor to Procrit (epoetin alfa), which was approved in 1993.²⁷ Aranesp and Procrit are growth factors that stimulate production of red blood cells by bone marrow.

In the proposed rule for 2003 hospital outpatient payments, the CMS indicated that it would increase Aranesp reimbursement by providing outpatient pass-through payments.²⁸ In the regulatory process, the CMS publishes payment system changes for the upcoming year in a proposed rule for public comment, then issues a final rule. In contrast to the proposed rule, the final 2003 payment rule indicated that both drugs would be reimbursed at the lower Procrit rate because Aranesp was sufficiently similar to Procrit, the older drug. The CMS determined that the treatments were "functionally equivalent" because they "use the same biological mechanism to produce the same clinical result," and thus warranted the same payment.²⁹

The CMS referred to comments from the manufacturer of the older treatment and input from a consultant to inform its decision, and expressed interest in a clinical trial to compare effectiveness of Aranesp and Procrit.³⁰ In the absence of pass-through payments, Aranesp payments were reduced 39 percent, from $3.89 to $2.37 per microgram.³¹

Responses from industry and government. The decision prompted a range of responses from manufacturers, the Biotechnology Industry Organization (BIO), and elected officials. Following the decision, some newspaper coverage portrayed the CMS’s efforts on costs as aggressive.³² Some members of Congress raised questions about how the CMS informed its decision and whether it followed proper procedures of public notice and comment.³³ Johnson and Johnson, which produces Procrit, supported the decision, while Amgen (the maker of Aranesp) filed suit against it. An appeals court dismissed the case, concluding that the CMS’s statutory rationale for the decision was not subject to judicial review.³⁴ BIO, the trade group for biotech product producers, responded with public statements against this and other hospital outpatient changes, a Capitol Hill press conference, print ads in congressional and local papers urging Congress to "keep the care in Medicare" and revise payment policies, and a Web site devoted to these issues.³⁵

In MMA, Congress prohibited future use of the "functional equivalence" approach in determining outpatient pass-through payments for drugs and biologics, while retaining the existing decision for Aranesp. The CMS continued to link Aranesp and Procrit payments in 2004 and 2005, evaluating clinical data from both companies to set the payment. Most recently, the CMS took the approach of separately establishing payments using market prices (while reserving the possibility of returning to the prior approach in the future).³⁶

The evolution of approaches to pay for Aranesp indicates the difficulty of policymakers’ reaching consensus on how to set payments, with some members of Congress opposing the use of linked payments and others raising concerns about costs to Medicare in the absence of linked payments.³⁷ Policymakers also differ on whether the limitation can apply to other settings where the drugs are provided, such as dialysis centers or physicians’ offices.³⁸

Implications

Top Overview Of Medicare's New... Case Studies Of Biotechnology... Implications NOTES

 
Fractured policy environment. Case studies show that active participants in Medicare coverage and payment decisions on biotechnology—typically patient groups, medical societies, and industry—tend to emphasize the potential clinical benefits of new treatments and that their arguments can be politically persuasive. At the same time, Medicare faces scrutiny to act as a prudent purchaser and use tax dollars wisely.³⁹ Yet it is rare to find active participants in new technology decisions whose primary concern is value or costs, which leaves considerable uncertainty for the CMS about whether or how to account for value considerations in decisions.

The case studies highlight these tensions and suggest that Medicare new technology policy neither is "captured" by industry and patient groups nor reflects a primary goal to limit access. Rather, decisions can best be understood as reaching an imperfect and evolving balance that incorporates access, evidence, and value considerations. Given the challenge of balancing differing perspectives on how decisions should be made, CMS decisions might run the risk of pleasing few of the people, most of the time.

Applying clinical evidence. Clinical evidence of net health benefit has emerged as a key filter for policy decisions on new treatments. In NCDs, a key question is how to apply uncertain evidence: Policies might deny coverage, grant national coverage with conditions (potentially including evidence requirements), or leave decisions at the local level. For example, the CMS included clinical trials as a component of coverage for off-label uses of colorectal cancer biotech and pharmaceutical drugs, while decisions for off-label non-Hodgkins lymphoma radiopharmaceuticals were left exclusively at the local level.

The many public questions on the CMS guidance on CED suggest that perspectives differ on how to apply uncertain evidence. The idea of conditioning coverage on evidence requirements dates back to a mid-1990s CMS decision to limit coverage for lung volume reduction surgery (LVRS) to patients in a clinical trial, with recent decisions requiring data collection in coverage for positron-emission tomography (PET) scans for suspected Alzheimer’s disease and a disease registry for implantable cardioverter-defibrillator (ICD) patients.⁴⁰

Role of costs. Practical experience suggests that efforts to develop policies that explicitly address costs or cost-effectiveness at the national level could result in the unintended consequence of policy moving in the opposite direction. From the late 1980s through 2000, the CMS-proposed role of costs grew narrower with each attempt to use rule making to develop coverage criteria. The CMS’s decision on functional equivalence in Aranesp payments, an approach related in spirit to cost-effectiveness, resulted in legislation limiting its future use.⁴¹ In the absence of explicit approaches, the CMS may address costly treatments in other ways (such as in what treatments are considered or how strict are conditions for national coverage). The impact will be increasingly apparent as high-cost new treatments, including biotech treatments, are incorporated into Medicare.

Decisions on individual treatments versus "rules of the game." Individual decisions, such as coverage decisions for off-label cancer drugs and linked payments for Aranesp and Procrit, might attract particular attention if they are seen as having the potential to be "precedent setting" and affect future decisions. The outcomes of decisions on individual treatments might be particularly important, given the difficulty of formally establishing criteria for determining what treatments are "reasonable and necessary" for national coverage. How policies are developed—through individual decisions versus guidances versus formal rule making—might attract increasing attention in the future.

Evolving policies. Medicare new technology policies are somewhat unusual in that the range of policy options is evolving and not completely defined.⁴² New approaches continue to be incorporated, with the potential consequence that decisions can come as a surprise, or their meaning might not be entirely clear. For example, the CMS decision to cover colorectal cancer drugs in clinical trials raised many operational and policy questions. Also, debate has continued on the scope and application of the congressional limitation on functional equivalence.

IN MANY WAYS, BIOTECHNOLOGY TREATMENTS ARE both the great hope and the great challenge in future Medicare policy making on new technology. The future of biotechnology, including personalized medicines tailored to individual health needs, offers great hope of future health improvements but also might raise new questions about clinical evidence and cost consequences. Recent reports indicate that Avastin, the colorectal cancer biopharmaceutical, is also promising in treating lung and breast cancer, with expected drug prices approaching $100,000 per year.⁴³ It is well recognized that the tensions among the access, clinical evidence, and cost consequences of new treatments are likely to intensify in the future. Going forward, the greatest gain in terms of transparency and rational policy making might arise from a primary emphasis on developing and disseminating a clearly identifiable set of "middle-ground" approaches for coverage and payment of new technology.

Editor's Notes

 
Patricia Keenan (patricia.keenan{at}yale.edu) is an assistant professor in the Division of Health Policy and Administration, Department of Epidemiology and Public Health, at the Yale University School of Medicine in New Haven, Connecticut. Peter Neumann is director of the Center for the Evaluation of Value and Risk in Health and a professor in the Institute for Clinical Research and Health Policy Studies, Tufts University School of Medicine, in Boston, Massachusetts. Kathryn Phillips is a professor of health economics and health services research at the School of Pharmacy, Institute for Health Policy Studies, and Comprehensive Cancer Center at the University of California, San Francisco (UCSF).

The authors acknowledge conversations about Medicare’s new technology policy with anonymous individuals that informed this paper, and they thank Colleen Barry and anonymous reviewers for their constructive comments on a prior draft. Kathryn A. Phillips gratefully acknowledges funding from the Blue Shield Foundation of California. The responsibility for any errors is the authors’ own.

NOTES

Top Overview Of Medicare's New... Case Studies Of Biotechnology... Implications NOTES

 

1. Biotechnology Industry Organization, BIO 2005–2006 Guide to Biotechnology, 30 June 2005, http://www.bio.org/speeches/pubs/er/BiotechGuide.pdf (accessed 12 June 2006).
2. For discussion of other treatments that share these characteristics, see T. Carino, S. Sheingold, and S. Tunis, "Using Clinical Trials as a Condition of Coverage: Lessons from the National Emphysema Treatment Trial," Clinical Trials 1, no. 1 (2004): 108–114[CrossRef][Medline]; M. Gillick, "Medicare Coverage for Technological Innovations—Time for New Criteria?" New England Journal of Medicine 350, no. 21 (2004): 2199–2203[Free Full Text]; P.S. Keenan, "Implications of Rising Medical Care Spending" (Doctoral dissertation, Harvard University, 2005); and M. McClellan and S. Tunis, "Medicare Coverage of ICDs," New England Journal of Medicine 352, no. 3 (2005): 222–224.[Free Full Text]
3. S.R. Tunis and J.L. Kang, "Improvements in Medicare Coverage of New Technology," Health Affairs 20, no. 5 (2001): 83–85[Free Full Text]; S.B. Foote, "Why Medicare Cannot Promulgate a National Coverage Rule: A Case of Regula Mortis," Journal of Health Politics, Policy and Law 27, no. 5 (2002): 708–730; and S.R. Tunis, "Why Medicare Has Not Established Criteria for Coverage Decisions," New England Journal of Medicine 250, no. 21 (2004): 2196–2198.
4. Centers for Medicare and Medicaid Services, "Factors CMS Considers in Opening a National Coverage Determination," 11 April 2006, http://www.cms.hhs.gov/mcd/ncpc_view_document.asp?id=6 (accessed 12 June 2006).
5. A.M. Garber, "Evidence-based Coverage Policy," Health Affairs 20, no. 5 (2001): 62–82[Abstract/Free Full Text]; Tunis and Kang, "Improvements in Medicare Coverage of New Technology"; and B.M. Straube, "How Changes in the Medicare Coverage Process Have Facilitated the Spread of New Technologies," Health Affairs 24 (2005): w314–w316 (published online 23 June 2005; 10.1377/hlthaff.w5.314).
6. P.J. Neumann et al., "Medicare’s National Coverage Decisions, 1999–2003: Quality of Evidence and Review Times," Health Affairs 21, no. 1 (2005): 243–254.
7. For more details on CED policy, see S.R. Tunis and S.D. Pearson, "Coverage Options for Promising Technologies: Medicare’s ‘Coverage with Evidence Development’," Health Affairs 25, no. 5 (2006): 1218–1230.[Abstract/Free Full Text]
8. We limit our scope to examining these policy changes that directly target new treatments. Other changes, such as the shift from average wholesale price (AWP) to average sales price (ASP) for Part B drugs and the Medicare drug benefit, hold important implications but are outside the scope of this paper.
9. For more details, see T. Carino et al., "Medicare’s Coverage of Colorectal Cancer Drugs: A Case Study in Evidence Development and Policy," Health Affairs 25, no. 5 (2006): 1231–1239.[Abstract/Free Full Text]
10. Letters are available at CMS, "Initial Public Comments for Anticancer Chemotherapy for Colorectal Cancer, CAG-00179N, 05/02/03–11/17/03," http://www.cms.hhs.gov/determinationprocess/downloads/id90.pdf (accessed 20 February 2006).
11. CMS, "Changes to the Hospital Outpatient PPS and Calendar Year 2003 Payment Rates," Federal Register 67, no. 212 (2002): 66756, Final Rule. The notice indicated that the CMS might review a drug if it were "novel, complex, or controversial," "may be costly," "may be subject to overutilization or misuse," or was FDA approved based on "surrogate outcomes."See also CMS, "Initial Public Comments for Anticancer Chemotherapy for Colorectal Cancer," letters from Chris Takimoto, University of Texas Health Science Center; Carolyn Aldridge, Cancer Research and Prevention Foundation; Cancer Leadership Council; Robert Comis, Coalition of National Cancer Cooperative Groups; Daniel Price, Washington Legal Foundation; and Richard Shilsky, University of Chicago.
12. G. Harris, "U.S. Weighs Not Paying for All Uses of Some Drugs," New York Times, 30 January 2004.
13. CMS, "Initial Public Comments for Anticancer Chemotherapy for Colorectal Cancer"; see, for example, letters from Robert Comis, Coalition of National Cancer Cooperative Groups; Richard Shilsky, University of Chicago; and Alan Venook, University of California, San Francisco.
14. R. Wittes, "Cancer Weapons, Out of Reach," Washington Post, 15 June 2004; C. Arnst, "Cancer Superdrugs, Costly Side Effects," Business Week, 21 June 2004; L. Szabo, "Price of Cancer Drugs Called ‘Mind-Boggling’," USA Today, 22 July 2004; and A. Dockser Marcus, "Price Becomes Factor in Cancer Treatment," Wall Street Journal, 7 September 2004.
15. CMS, "Initial Public Comments for Anticancer Chemotherapy for Colorectal Cancer"; see letters from Russell Ellison, Sanofi-Synthelabo; and Kathy Means, Patton Boggs.
16. CMS, "View Public Comments for Anticancer Chemotherapy for Colorectal Cancer (CAG-00179N)," http://www.cms.hhs.gov/mcd/viewpubliccomments.asp?nca_id=90 (accessed 20 February 2006).
17. CMS, "Decision Memo for Anticancer Chemotherapy for Colorectal Cancer (CAG-00179N)," 28 January 2005, http://www.cms.hhs.gov/mcd/viewdecisionmemo.asp?id=90 (accessed 12 June 2006).
18. CMS, "Factors CMS Considers When Making a Determination of Coverage with Evidence Development" (Baltimore: CMS, April 2005). Factors include (1) questions about whether a treatment is applicable to individual patients, and (2) instances when clinical evidence is suggestive but not conclusive regarding medical benefits.
19. CMS, "Fact Sheet: CMS Responds to Stakeholder Feedback regarding Coverage with Evidence Development," 12 July 2005, http://www.cms.hhs.gov/MedicareCoverageGuideDocs/Downloads/guidfactsheet.pdf (accessed 30 January 2006); and CMS, "National Coverage Determinations with Data Collection as a Condition of Coverage: Coverage with Evidence Development," 12 July 2006, http://www.cms.hhs.gov/mcd/ncpc_view_document.asp?id=8 (accessed 16 July 2006).
20. CMS, "Decision Memo for Radioimmunotherapy for Non-Hodgkin’s Lymphoma (CAG-00163N)," http://www.cms.hhs.gov/mcd/viewdecisionmemo.asp?id=38 (accessed 12 June 2006).
21. Harris, "U.S. Weighs Not Paying for All Uses of Some Drugs"; and C. Arnst, "Medicare versus Cancer Patients; Refusing to Reimburse Off-Label Treatment Is Far from the Best Way to Cut Costs," Business Week, 16 February 2004.
22. Ibid.; and L. Lagnado, "Last Hope for Lymphoma, $28,000 a Dose," Wall Street Journal, 18 June 2003.
23. K. Schwartz, Patients Against Lymphoma, letter to Dennis G. Smith, CMS, 29 February 2004, http://www.lymphomation.org/cms-off-label.pdf (accessed 9 February 2006).
24. Harris, "U.S. Weighs Not Paying for All Uses of Some Drugs"; Arnst, "Medicare versus Cancer Patients"; and CMS, "Proposed Decision Memo for Radioimmunotherapy for Non-Hodgkin’s Lymphoma."
25. CMS, "Decision Memo for Radioimmunotherapy for Non-Hodgkin’s Lymphoma."
26. CMS, "View Public Comments for Radioimmunotherapy for Non-Hodgkin’s Lymphoma (CAG-00163N)," http://www.cms.hhs.gov/mcd/viewpubliccomments.asp?nca_id=38 (accessed 20 February 2006).
27. Long-standing competition between these two products has also involved legal challenges over rights and charges of preferential pricing. See, for example, A. Pollack, "Johnson Sues Amgen over Sales Practice," New York Times, 13 October 2005; and L. McGinley and D. Hamilton, "Drug Dispute Is Dragged to Capitol Hill," Wall Street Journal, 22 April 2003.
28. CMS, "Changes to the Hospital Outpatient PPS and Calendar Year 2003 Payment Rates," Proposed Rule.
29. Part of the rationale that the CMS cited was its authority in sec. 1833(t)(2)(E) of the Social Security Act to make adjustments to "ensure equitable payments." CMS, "Changes to the Hospital Outpatient PPS and Calendar Year 2003 Payment Rates," Final Rule, 66758. This approach is analytically similar to local policies targeting payments to lowest-cost equally effective treatments, referred to as "least costly alternative." However, functional equivalence differs because it applied nationally rather than through individual contractors’ decisions, because it resulted in denial of new technology pass-through payments, and because it held potential to serve as a precedent for other national decisions. On least costly alternative, see Medicare Payment Advisory Commission, "Using Clinical and Cost Effectiveness in Medicare," chap. 8 in Report to the Congress: Issues in a Modernized Medicare Program (Washington: MedPAC, June 2005).
30. Amgen Inc. v. Scully, 234 F. Supp. 2d 9, 2002 U.S. Dist. LEXIS 24618 (D.D.C., 2002); McGinley and Hamilton, "Drug Dispute Is Dragged to Capitol Hill"; CMS, "Changes to the Hospital Outpatient PPS and Calendar Year 2003 Payment Rates," Final Rule; L. McGinley and S. Lueck, "Harsh Medicine: As Medicare Chief Reins In Costs, Opposition Grows," Wall Street Journal, 16 July 2003; and G. Harris, "Two Cancer Drugs, No Comparative Data," New York Times, 26 February 2004.
31. R. Pear, "U.S. Limiting Costs of Drugs for Medicare," New York Times, 21 April 2003.
32. Ibid.; McGinley and Hamilton, "Drug Dispute"; and McGinley and Lueck, "Harsh Medicine."
33. "Congress Questions CMS Decision to Drop Pass-Through Status for Amgen Drug," Inside CMS, 7 Novem-ber 2002; "E+C Committee Eyes Changing Pass-Through Payment System in Medicare Reform Bill," Inside CMS, 13 March 2003; and "Text: Johnson Letter Asking GAO to Expand OPPS Probe," Inside CMS, 27 March 2003.
34. Amgen v. Smith, 360 U.S. App. D.C. 88, 357 F.3d 103, 2004 U.S. App. LEXIS 2406 (D.D.C., 2004).
35. BIO, "Biotechnology Industry Organization, Milestones 2004," 30 January 2004, http://www.bio.org/speeches/pubs/milestone04/healthcare.asp (accessed 19 February 2006).
36. CMS, "Changes to the Hospital Outpatient PPS for Calendar Year 2006," Federal Register 70, no. 217 (2005): 68652.
37. See, for example, "Medicare Payment to Hospital Outpatient Facilities to Rise 4 Percent, CMS Documents Indicate," BNA’s Health Care Policy Report, 8 November 2004; and "CMS, Thomas at Odds over Scrapping Aranesp, Procrit Pricing Link," Inside CMS, 17 November 2005.
38. "Amgen Halts Push to Secure Congressional Support for Broad Ban on Tied Payments," Inside CMS, 26 Feb-ruary 2004.
39. See, for example, MedPAC, "Payment for New Technologies in Medicare’s Prospective Payment Systems," chap. 4 in Report to the Congress: Medicare Payment Policy (Washington: MedPAC, March 2003); and MedPAC, "Context for Medicare Payment Policy," chap. 1 in Report to the Congress: Medicare Payment Policy (Washington: MedPAC, March 2006).
40. W. Leary, "Debating the Benefits and Costs of Major Surgery for Emphysema," NewYork Times, 14 May 1996; and Carino et al.,, "Using Clinical Trials as a Condition of Coverage."
41. Neumann et al., "Medicare and Cost-Effectiveness Analysis."
42. For example, in comparison, the range of options for the uninsured (such as private subsidies or public expansions) is familiar to participants in uninsurance policy debates and is a topic of multiple reports.
43. A. Berenson, "A Cancer Drug Shows Promise, at a Price That Many Can’t Pay," New York Times, 15 February 2006.

                      What's this?

This article has been cited by other articles:

				M. R. Gillick Controlling Off-Label Medication Use Ann Intern Med, March 3, 2009; 150(5): 344 - 347. [Abstract] [Full Text] [PDF]

				P. J. Neumann, M. S. Kamae, and J. A. Palmer Medicare's National Coverage Decisions For Technologies, 1999-2007 Health Aff., November 1, 2008; 27(6): 1620 - 1631. [Abstract] [Full Text] [PDF]

				J. Oberlander Through the Looking Glass: The Politics of the Medicare Prescription Drug, Improvement, and Modernization Act Journal of Health Politics Policy and Law, April 1, 2007; 32(2): 187 - 219. [Abstract] [PDF]