Dendreon Passes Medicare Panel’s Questions About Provenge Effectiveness
Dendreon followers can breathe a sigh of relief.
A panel of physicians and researchers who advise the federal Medicare agency expressed an intermediate amount of confidence that the Seattle biotech company’s immune-booster for prostate cancer extends lives. The vote, at a public hearing today held by the Centers for Medicare and Medicaid Services, is a strong sign that the agency will continue to reimburse physicians who prescribe the new treatment for uses that are approved by the FDA. As many analysts expected, the panel also disapproved of unapproved uses, which are known as “off-label.”
This hearing was held after Dendreon (NASDAQ: DNDN) made waves in April by winning FDA approval, and then promptly pricing the drug at $93,000 per patient. The decision caused fierce debate. Proponents say the drug offers a potential lifeline and only mild side effects for terminal patients. Opponents, meanwhile, have questioned whether the data to support the drug is really bulletproof and raised doubts about whether $93,000 is too much to pay for a treatment that only offers a 4.1 month benefit in median survival time when compared to a placebo.
Medicare will now take the panel’s recommendations into account as it forms a final decision on coverage for the Dendreon drug by the end of June. The hearing shouldn’t have an effect on Medicare’s regional units, most of which have already begun reimbursing for the product.
“The bottom line is that the outcome of the MEDCAC panel and vote was a clear positive for Dendreon,” said JP Morgan analyst Cory Kasimov, in a note to clients today. “We believe it’s increasingly clear that CMS will cover Provenge in accordance with the product’s label, which is exactly in line with our expectations. The all-important survival question was rather easily cleared. In our view, investors should take a significant amount of comfort with the outcome of today’s discussion and vote.”
That’s sure to be a relief for Dendreon backers, because a lot was riding on today’s panel. Trading in Dendreon stock (NASDAQ: [[ticker:DNDN]) was halted today during the proceedings, because sipuleucel-T (Provenge) is the company’s only marketed product and any striking recommendation by the panel could have caused a lot of volatility in the stock.
This vote was different from an FDA advisory panel vote, for which panelists are usually asked to make a black-or-white, up-or-down recommendation on whether a drug deserves a spot on the U.S. market. This panel was instead asked to rate their degree of confidence—on a scale of 1 to 5 with 1 being the weakest amount of confidence—how strong they think the evidence is for the Dendreon drug. The panel put its confidence in the survival benefit at 3.7, which Kasimov interpreted as “a clear positive.”
Not surprisingly, the panel also said it didn’t have much confidence that the clinical trial results are generalizable to broader groups of prostate cancer patients than the ones studied so far. While this hearing wasn’t ostensibly about cost, that’s essentially the rub of the issue which I highlighted in a preview story yesterday. Today’s vote therefore gives Medicare some political cover if it wants to issue rules essentially putting a lid on spending by cracking down on such “off-label use.”
Dendreon issued a brief statement after today’s panel, which really didn’t say much, and didn’t crow about emerging victorious. Dendreon CEO Mitch Gold said, in the statement, “we look forward to working closely with CMS throughout the [National Coverage Analysis] process to ensure patients with advanced prostate cancer have access to Provenge.”