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Medicare Prescription Drug Coverage Off-Label Uses of Chemotherapy Expanded

Drug Benefit TrendsDrug Benefit Trends Vol 21 No 3
Volume 21
Issue 3

New guidelines from the Centers for Medicare & Medicaid Services (CMS) that increase the number of compendia health insurers rely on to determine whether a drug use is appropriate will greatly expand the number of off-label uses of chemotherapy agents for which the agency will reimburse.

New guidelines from the Centers for Medicare & Medicaid Services (CMS) that increase the number of compendia health insurers rely on to determine whether a drug use is appropriate will greatly expand the number of off-label uses of chemotherapy agents for which the agency will reimburse. The change was hailed by the Pharmaceutical Research and Manufacturers of America (PhRMA) as removing barriers so that “cancer patients have access to the treatments they need.” However, critics argued that pharmaceutical manufacturers can have their drugs listed in some of the newly recognized compendia with only slim evidence that their medications are effective for the indication in question.

In 1993, Congress determined that the Medicare program, then limited to reimbursing for drugs administered in physicians’ offices or hospitals, should cover any treatments listed in at least 1 of 3 specified compendia, even if the indications had not been recognized by the FDA. Since then, 2 of the compendia have ceased publication, leaving the American Hospital Formulary Service Drug Information (AHFS DI) as the sole official reference.

Now, in addition to the AHFS DI, the CMS will look to the Drugs & Biologics Compendium published by the National Comprehensive Cancer Network, Thomson’s DrugDex, and Elsevier’s Clinical Pharmacology. If a chemotherapy agent is indicated for a particular use in any 1 of the 4 compendia, Medicare will pay for the drug for that indication as long as none of the compendia contain a specific advisory against it. The additional reference works will make a significant difference: in 2007, analysts at Tufts University and Duke University reviewed 14 off-label uses of 6 chemotherapy drugs and found only 2 of those uses listed in AHFS DI, but all 14 uses were listed in at least 1 of the 4 references now relied on by the CMS.

While the CMS’s acceptance of the 3 additional compendia does not directly control decisions insurers make regarding coverage for their non-Medicare enrollees, the change will pressure insurers to be more inclusive in their private plan coverage.

Ironically, shortly after the new CMS rules went into effect, Peter B. Bach, MD, department of medicine, Memorial Sloan-Kettering Cancer Center, New York, and a former senior advisor on cancer policy at the CMS, published a report in which he claims that even under the old policy, the Medicare program spends too much on oncology treatments. In a research article on health policy in the February 5 issue of the New England Journal of Medicine, he argues that despite a 267% increase in spending on chemotherapy drugs between 1997 and 2004, the program is not getting its money’s worth. “It’s pretty clear with many of these new drugs, their cost-effectiveness is lower than that of previous drugs,” he said in an interview. His recommendations are to change the law to give the CMS more flexibility in deciding whether to cover an off-label use and to establish a new center that would compare the effectiveness of competing therapies.

Medicare Prescription Drug CoverageCMS Postpones Change in Part D Formulary “Musts”
Under the Medicare Improvement for Patients and Providers Act of 2008, the CMS is supposed to examine the medication patterns of Part D beneficiaries and identify which drug categories and classes must be offered by all plans. However, the agency has found the task too daunting to be able to have results ready by April, when plans must submit their formularies for the 2010 benefit year. The CMS is postponing any modifications until 2011 and issued an interim rule continuing into 2010 the current 6 drug classes for which all drugs must be covered: anticonvulsants, antidepressants, antineoplastics, antipsychotics, antiretrovirals, and immunosuppressants for organ transplant patients.

All drugs in these categories and classes must be included on Part D formularies, and plans are forbidden from using drug utilization management techniques, such as step therapy, quantity limitations, or prior authorization, to encourage use of less costly options.

Medicare Care Coordination Falls Short
Between April 2002 and June 2005, the CMS conducted 15 pilot programs to test the theory that persons with chronic conditions receiving adequate-and continuing-counseling that encouraged them to take their prescribed drugs and otherwise adhere to the treatment regimens set forth by their physicians would have fewer acute episodes. Such coordination of care was expected to both improve the patients’ quality of life and lower Medicare expenditures. But findings of a study published in the February 11 issue of the Journal of the American Medical Association showed that the programs simply did not work.

“These programs had favorable effects on none of the adherence measures,” explained analysts from Mathematica Policy Research (MPR), which had been given a grant from the CMS to examine the results. For 13 of the 15 programs, the hospitalization rate was no lower than it was for the control group of patients, who did not receive any special counseling. Moreover, “none of the programs reduced regular Medicare expenditures, even without the fees paid to the care coordination programs,” the researchers said.

The 15 programs varied greatly in how they worked. Eleven relied on telephone contacts with enrollees, while the remaining 4 made home visits; some contacted patients only once a month, whereas other programs contacted them as many as 8 times per month; and 6 used home telemonitoring for daily transmission of clinical measures.

Although none of the approaches hold the promise of cutting CMS outlays, 2 programs, run by Health Quality Partners in Pennsylvania and Mercy Medical Center in Iowa, suggest that care-coordination programs can, in fact, improve the well-being of persons with chronic conditions. The MPR investigators highlight 5 differences between these 2 programs and the other 13: they taught patients how to take their medications, made in-person rather than telephone contacts, worked closely with local hospitals, had frequent contact with the patients’ physicians, and served enrollees whose average monthly Medicare expenditures ranged between $900 and $1200 (rather than enrollees who were more seriously ill or had little risk of hospitalization).

Floridians to Be Informed of Right to Leave HMOs
A lawsuit filed in the US District Court for the Southern District of Florida (Reid v Benson [No. 08-60040-CIV-Zloch/Snow]) alleging that Florida disregarded a federal law by not clarifying when Medicaid recipients enrolled in an MCO could leave their HMOs has been settled. The state has promised both to inform beneficiaries of their rights regarding disenrollment and to insist that participating plans include the information in member handbooks and ensure that choice-counseling hotline operators know the good-cause disenrollment rules.

In general, once Medicare beneficiaries participating in the Medicaid Reform pilot project being run in 5 Florida counties select an HMO, they must remain in it for at least a year. But now the state’s Agency for Health Care Administration will remind beneficiaries that there are a number of circumstances under which they can leave their health plan, including the patient’s preferred physician exiting the plan, poor care, long waits for care, or denials of care. “As the state moves more and more to managed care, these rights become more critical,” argued Miriam Harmatz, the lawyer who brought the original case on behalf of 200,000 Floridians participating in the Medicaid Reform pilot project.

Michael Garner, president and CEO of the Florida Association of Health Plans, said that his members “very much want to make sure our customers and the patients we have in our health plans get the services they want and the provider they want.” However, he complained that the new advisories are too sweeping; for example, they allow beneficiaries to leave a plan if their physician retires.

In Other Legislative and Regulatory News . . .The possibility that propylthiouracil and methimazole may cause hepatotoxicity and that minocycline may cause thyroid disorders are among the “signals of serious risks” that the FDA is currently investigating. The agency is also examining whether SSRIs and serotonin norepinephrine reuptake inhibitors (SNRIs) may cause birth defects. All of these signals are included on the February 4 list of concerns raised through the FDA’s adverse event reporting system between July and September 2008. The agency is publishing such a list every 3 months, following instructions from Congress in the FDA Amendments Act of 2007 but emphasizes that it is spotlighting only potential safety issues, and not suggesting that providers stop prescribing the drugs in question. The full list for the quarter is available at www.fda.gov/cder/aers/potential_signals/potential_signals_2008Q3.htm.

The federal law that permits workers to continue their health insurance when they lose their jobs is little used. Findings of a study by the Commonwealth Fund showed that only 9% of unemployed persons continued coverage as allowed by COBRA, primarily because laid-off employees could not afford to pay the full cost of the insurance. This figure might change dramatically with the provision signed into law by President Obama on February 17 that provides federal funds for 65% of a laid-off worker’s COBRA premiums for up to 9 months.

The data exclusivity term for biosimilars may not make much difference in the short run. A major sticking point in the debate over authorizing “generic” versions of biosimilars has been how long makers of biosimilars should have to wait before they can use the safety and efficacy data generated by the products’ original makers. But a new study, written by Ted Buckley, PhD, director of economic policy at the Biotechnology Industry Organization (BIO); Joseph Golec, associate professor, School of Business at the University of Connecticut, Storrs; and John Vernon, assistant professor of health policy and management, University of North Carolina at Chapel Hill, suggests that the FDA will not set up a pathway for biosimilars until 2014 and notes that by then, data on the most popular biosimilars would be available no matter how the debate turns out. If the period of exclusivity were set at 14 years, as the BIO advocates, it would have expired for 6 of the 11 leading biosimilars currently on the market-3 more than would be protected by a 12-year data exclusivity rule. The analysts warn, however, that establishing too short a period would discourage the research and development of new biosimilars.

The 2 largest health insurers in Pennsylvania have withdrawn their application to combine. The planned merger of Independence Blue Cross and Highmark needed to be approved by the state insurance department, and Pennsylvania Insurance Commissioner Joel Ario said, “we were prepared to issue a disapproval order” out of concern that the merger would reduce competition.

The Federal Trade Commission sued Ovation Pharmaceuticals, claiming that it attempted to create a US monopoly for drugs to treat patent ductus arteriosus (PDA). The suit, filed in the US District Court in Minneapolis on December 16, centered on Ovation’s raising the price of Indocin from $36 to almost $500-a nearly 1300% jump-in 2006. The increase came after the company acquired the rights to NeoProfen, its only competitor for the treatment of PDA, which is a potentially life-threatening congenital heart defect. Insisting that it did nothing wrong, Ovation claims that it had acquired NeoProfen because it is more effective than Indocin and that the drugs are not interchangeable in treating PDA, which affects more than 30,000 premature infants annually.

The FDA ordered manufacturers of antiseizure medications to add to their labeling a warning about the increased risk of suicidal behavior and ideation associated with the use of the drugs-but did not, as the agency had planned a year ago, require it to be a boxed warning. The compromise follows the unanimous recommendation made last July by an FDA advisory committee. Along with adding the warning to their labels, makers of the affected drugs must develop medication guides that outline the risks and can be given to persons who receive new prescriptions for the drugs. The advisory panel had worried that a stronger warning on the drugs’ labeling might lead some physicians to stop prescribing them for patients who would benefit from them. “Patients being treated with antiepileptic drugs for any indication should be monitored for the emergence or worsening of depression, suicidal thoughts or behavior, or any unusual changes in mood or behavior,” explained Russell Katz, MD, director of the Division of Neurology Products at the Center for Drug Evaluation and Research. But he also cautioned that “patients who are currently taking an antiepileptic medicine should not make any treatment changes without talking to their health care professional.”

New ethical guidelines from PhRMA went into effect on January 1, discouraging even simple gifts of pens or T-shirts to physicians and clinics if the items bear a company logo or product brand name. The new standards also deter pharmaceutical firms from paying for physicians’ meals-even those served during medical education events-and state that all grant money allocated for continuing medical education programs should be handled by persons outside the companies’ sales and marketing departments. While compliance is voluntary, PhRMA said it will encourage adherence by publishing a list of pharmaceutical manufacturers that flout the new guidelines.

Giant Food has taken the ultimate step in the price wars to increase prescription drug business. Like many of its competitors, after offering deeply discounted prices on many generic maintenance medications-as low as $9.99 for a 90-day supply-Giant Food is providing 9 frequently prescribed antibiotics at no charge. The list of drugs includes amoxicillin, bacitracin, ciprofloxacin, erythromycin, and penicillin. Tablet, capsule, liquid, and ophthalmic ointment forms are covered by the promotion, which runs through March 21; injectables are excluded. Giant Food has 164 pharmacy outlets at its supermarkets in the greater Washington, DC–Baltimore market. Wegman’s Food Markets quickly followed with a similar offer of free antibiotics at its 72 stores.

The Massachusetts health insurance plan-said to be a model for the universal health care approach proposed by the Obama administration-has reduced the percentage of the state’s population without health insurance to 2.6%, half of what it had been, according to a new study by the Urban Institute. But the analysis showed that there are significantly higher percentages of uninsured among some subpopulations: 7.2% of Hispanics and 5% of low-income residents are without health insurance.

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