By Jeffrey Young - 07/31/08 06:17 PM EDT
The Centers for Medicare and Medicaid Services (CMS) has published its first-ever quarterly list of drugs, medical devices and procedures that Medicare patients may no longer be able to access.
The list, posted on CMS’s website this week, provides an unprecedented glimpse into what companies or sectors might be celebrating or mourning in the months ahead. It’s the Medicare national coverage determinations, or NCDs, that can be the difference between whether a drug- or device maker sees a huge return on research and development or a crushing bust.
CMS lists 19 potential topics for national coverage determinations in the next quarter-year. These topics include drugs to treat anemia, “proton beam therapy” to treat prostate cancer, and tiny, implantable devices that keep coronary arteries open while dispensing medication, called drug-eluting stents.
When CMS announces it has begun a NCD, manufacturers, medical practitioners and investors eagerly — and anxiously — watch the process unfold for signals of what the agency will decide.
Not only does Medicare command a large portion of the healthcare marketplace, private insurance companies regularly adopt the same or similar coverage policies based on Medicare’s decisions.
CMS Chief Medical Officer Barry Straube said the comments the agency makes about the list would help it establish its priorities. “This will allow us to pick and choose the most relevant topics going forward,” said Straube, who also is the director of CMS’s Office of Clinical Standards and Quality.
The list itself is composed of areas that CMS already believes may need to be evaluated, Straube said. “They all appear to either have some controversy about them … [or] they are topics that there isn’t a whole lot of evidence as to what their exact use is in all circumstances,” he said. The Food and Drug Administration (FDA) have not even approved some of the products on the list yet, he noted.
CMS’s regional contractors make the vast majority of coverage determinations. In most cases when the agency’s headquarters steps in, it is in response to a request by manufacturers or medical providers seeking greater clarity on Medicare’s coverage policies based on variations in the locally made decisions. Other times, CMS will initiate a national coverage determination based on agency staff recommendations when they see, for example, new clinical evidence that they believe merits a reconsideration of an old decision.
Based on the statutory standard of whether the new technology or procedure is “reasonable and necessary,” the resultant policy then applies to Medicare providers and patients across the country. These decisions do not affect the Medicare Part D prescription-drug benefit, which is administered by private health insurance companies.
Straube stressed that the actual NCD process will not change and that CMS does not intend to centralize coverage determinations. “We have no plans right now to change the national coverage-versus-local coverage decision process,” he said, noting that CMS lacks the financial resources to take over for the regional contractors.
The list of “potential NCD topics” is the latest step in the agency’s attempts to be more transparent in how it executes coverage policies. In 2006, CMS published a guidance document intended to spell out more formally how the NCD process works. President Bush issued an executive order in 2006 requiring federal health agencies like CMS to publicly disclose more information about what they pay for drugs, devices, procedures and other aspects of medical care.
The increased transparency about the national coverage determination sought by CMS could prove equal parts helpful and troublesome to these interests.
Knowing in advance that the agency might be eyeing a national coverage decision on a product could give the company time to prepare its response and help the capital markets more thoughtfully consider the impact of a national policy on that company and its competitors.
On the other hand, by releasing a list of potential areas of interest it may never pursue, CMS could create undue disquiet among manufactures and investors, and among providers and patients, about policy changes that will not come to pass.
The drug maker Amgen’s anti-anemia drugs appear at the top of CMS’s list.
The medications, called Aranesp or Epogen or Procrit when sold under license by Johnson & Johnson , have been subject to intense scrutiny by CMS and the FDA over the last several years. Among other things, the agencies have reviewed evidence suggesting that the medicines may be harmful when used on some cancer patients. On Wednesday, the FDA instructed Amgen and Johnson & Johnson to add stronger warnings to the drugs’ labels.
An Amgen spokeswoman offered a cautious response to the CMS list, emphasizing that the public should not misunderstand its purpose. “It is important to note that the new list is of potential NCDs that CMS is considering as a step to increase transparency in the NCD process. It is not a list of NCDs that CMS will initiate,” Kelley Davenport, the firm’s director of corporate communications, wrote in an e-mail.
Straube acknowledged that some observers might jump to conclusions about CMS’s intentions when they see the content of the list. “There is always the potential that some people are going to perhaps read more into this list of topics than we intend them to,” he said.