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Jill Wechsler is Pharm Exec's Washington Corespondent
While CMS officials praise the CED policy as a way to extend Medicare coverage, patients and industry fear the agency won't reimburse for innovative treatments unless sponsors support post-approval studies.
The medicare prescription drug benefit, which began January 1, 2006, makes the federal government the largest purchaser of pharmaceuticals in the United States, and probably in the world. The Centers for Medicare and Medicaid Services (CMS) will spend more than $1 trillion on medicines over the next decade—a volume that will influence the market broadly.
Although the media have focused on how much seniors will have to pay for medicines, and pharma is immersed in calculations of whether increased utilization will offset pricing pressures, this costly benefit promises to have an even more significant impact on the drug development and approval process. Less-noticed provisions in the Medicare Modernization
Act (MMA) support more research on comparative drug effectiveness, which aims to help CMS steer utilization to more cost-effective medicines.
As the "big gorilla in the corner," CMS concerns are beginning to color FDA policies, commented attorney Matthew Van Hook at a recent conference on FDA-CMS coordination, sponsored by the Food and Drug Law Institute (FDLI). He and others expect FDA market-approval decisions to appear more provisional in the future, as CMS limits reimbursement to products that demonstrate clinical advantage or cost-benefit over available medicines.
CMS' expanded clout over the industry has generated talk about a more specific role for the Medicare agency in FDA regulatory activities. CMS Administrator Mark McClellan initiated closer cooperation between the two agencies during his stint as FDA commissioner, which ended two years ago. He hoped to help pharma and biotech sponsors generate research information that could support Medicare coverage decisions for Part B drugs and biologics, and also supported an FDA-CMS coordinated review of new drug-eluting stents. An FDA-CMS parallel review process for new medical technologies could speed access to some new treatments, but industry, as well as FDA officials, are leery of the idea. FDA Deputy Commissioner Scott Gottlieb commented at the FDLI conference that direct CMS involvement in application reviews could add to the already long and expensive development process. Pharma and medical device companies are also concerned about FDA sharing secret trade information with another government agency, particularly one charged with holding the line on healthcare spending.
However, CMS does not need to be formally involved in the FDA review process to cast a long shadow over industry's R&D. Biotech and medical device companies are consulting more often with CMS early in the development process to avoid surprise, last-minute information requests, like additional safety data for certain population groups. FDA is considering a pilot test of a more formal parallel review process for medical devices. Such an approach should be a "rare occurrence," reserved for unusual products that offer important clinical benefits, Gottlieb noted, but observers expect it could extend to drugs in the future.
FDA is also working more closely with CMS in preparing guidance on certain research issues, such as the use of pharmacogenomic tests with personalized medicine. And in case a sponsor wants FDA to share proprietary information with CMS to accelerate a coverage decision, the two agencies continue to talk about finalizing a long-discussed memorandum of understanding (MOU) that would permit FDA and CMS to share data.
A separate CMS initiative indicates how influential the agency may be in shaping drug development and utilization decisions. A new Coverage with Evidence Development (CED) policy permits Medicare payment for off-label uses of a new drug or device, provided that patients participate in studies to collect additional data documenting benefits for new patient populations or indications. Last year, CMS decided to cover four colorectal cancer therapies for off-label uses, but only for patients enrolled in certain clinical trials sponsored by the National Cancer Institute (NCI).
While CMS officials praise the CED policy as a way to extend Medicare coverage, patients and industry fear the agency will deny reimbursement of innovative treatments unless sponsors support post-approval studies. In response to voluminous criticism of the initial proposal, CMS Senior Advisor Peter Bach said CMS will issue a revised draft guidance describing a narrower focus for the CED program. At the FDLI conference, Bach noted the policy will only apply when a new drug appears "incredibly promising" for an extended population.
Less controversial are plans for more FDA-CMS collaboration in the area of post-market surveillance. Once a drug comes to market, Gottlieb said, the two agencies will be involved in a number of efforts to evaluate safety and appropriate use; one early initiative is to coordinate policies for establishing patient registries to answer outstanding questions not resolved in clinical trials.
CMS is also working with its other sister agencies to gain more information on the effectiveness and value of medical treatments. A collaboration with NCI aims to encourage post-approval cancer studies to provide more information about off-label uses for reimbursement.
A main source of data on the effectiveness of drugs and medical treatments is the Agency for Healthcare Research & Quality (AHRQ), which is charged by Section 1013 of the MMA to support more comparative effectiveness studies on medicines widely used by the elderly. In December 2005, AHRQ released its first comparative effectiveness review (CER) on proton pump inhibitors (PPIs). It found PPIs may be as effective as surgery in treating GERD (gastroesophageal reflux disease), but noted little difference in effectiveness among brand-name and generic drugs.
Additional CERs will assess how well drugs manage cancer-induced anemia and off-label use of certain antipsychotics, among other topics related to 10 priority research areas: arthritis, cancer, diabetes, depression, dementia, heart disease, pulmonary disease, pneumonia, stroke, and stomach ulcers. In January, AHRQ began the process of identifying another set of important health conditions that warrant comparisons of treatment options. This second group will include conditions prevalent in Medicaid populations and state children's health programs, as well as Medicare.
Where CER analysis finds knowledge gaps in the existing literature, AHRQ will call on a network of research centers to answer the questions. Current studies are assessing the effectiveness and safety of drugs in treating arthritis, whether antidepressants raise the risk of pneumonia in the elderly, and how well new glucose-control drugs manage diabetes.
FDA is working more closely with AHRQ to keep abreast of its growing portfolio of health outcomes research involving marketed drugs. In January, FDA Office of Drug Safety Deputy Director Anne Trontell moved to AHRQ for a one-year assignment. Trontell will provide FDA input on AHRQ drug safety and effectiveness research, including comparisons of drugs and other treatments.
Closer collaboration between CMS and FDA is likely to build tension between the contradictory missions of the two agencies: FDA's task is to promote public access to safe and effective drugs and medical products, while CMS aims to ensure that it pays appropriately for reasonable and necessary treatments. Just how much blurring arises between the two goals remains to be seen.
Managing Medications One way the government aims to control drug spending is by paying special attention to patients who are taking several therapies concurrently. Medicare requires prescription drug plans (PDPs) to establish Medication Therapy Management Programs (MTMPs) for seniors with multiple chronic diseases who spend more than $4,000 a year on medicines. The aim is to ensure appropriate prescribing, boost compliance, and reduce adverse events for these patients.
Retail pharmacists back MTMP as a way to gain reimbursement from PDPs for counseling patients on appropriate medication use. Pharma companies stand to benefit from improved patient compliance and fewer side effects. However, it's optional for patients to sign up for MTMP services, and it's not clear how strongly PDPs will work to implement a program that adds to their costs while offering uncertain benefits: MTMP may boost drug spending as a way to keep patients out of hospitals and doctors' offices, but stand-alone drug plans have little to gain from this trade-off.
On the other hand, Medicare Advantage plans that cover both medical services and prescription drugs have greater incentives to establish effective MTMPs and more experience with case management activities to do so. CMS is working on methods for measuring total costs and savings from MTMPs, and pharma companies may find such efforts helpful in demonstrating the value of medicines in improving healthcare. So far, CMS has provided little guidance on how drug plans should meet the MTMP requirement, but has promised to do so in the coming year as drug plans become more established.
Jill Wechsler is Pharm Exec's Washington correspondent. She can be reached at email@example.com