Chalk up another victory for Seattle-based Dendreon—it has persuaded Medicare officials to provide full reimbursement to doctors who prescribe its new $93,000 prostate cancer drug.
The Centers for Medicare and Medicaid Services (CMS), the agency that runs the federal health insurance program for the elderly, said today in a draft memo that “the evidence is adequate” to say that Dendreon’s immune-booster, sipuleucel-T (Provenge), “improves health outcomes for Medicare beneficiaries” with prostate cancer. The draft will now be subject to public comments for three months, at which point it is expected to become formal policy of the Medicare agency.
The agency’s determination was widely anticipated on Wall Street, given that an advisory panel to Medicare said back in November that there was enough clinical trial evidence to support reimbursement of physicians who prescribe the novel therapy from Dendreon. But there has been some doubt about the product’s reimbursement profile ever since last April, when the FDA granted Dendreon clearance to start selling the product in the U.S. The company set the price at $93,000 for a course of treatment, which stirred controversy, as some critics argued that was too much to pay for a drug that offers a median survival advantage of about four months compared to a placebo. Analysts that I polled prior to Dendreon’s FDA approval were expecting a much more modest price, of around $62,000.
This draft memo is a long document, but the gist is pretty clear. Some analysts had speculated that while Medicare was likely to cover Provenge, it might impose certain restrictions on doctors who prescribe the drug in patient populations other than those included in Dendreon’s clinical trials—what is known as “off-label” use. Today’s draft memo doesn’t include any specific prohibition of “off-label” use. That was something of “an unexpected bonus,” said David Miller, president of Biotech Stock Research in Seattle, in a note to clients.
“This is a win for Dendreon,” Miller wrote.
You can read the full Medicare document by clicking here.
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