Congress Grants Reprieve for Cancer Treatment

Published March 1, 2008

Congress has reversed a decision by the Centers for Medicare and Medicaid Services (CMS) to pay less than the acquisition cost for popular cancer-treating radioimmunotherapy drugs, just before that decision was to take effect.

“Lawmakers saw an injustice and took a measure to provide patients complete access to effective therapy,” said Dr. James A. Bianco, president and CEO of Cell Therapeutics, Inc. & Subsidiaries, a company that produces radioimmunotherapy drugs.

“It’s remarkable that the Senate staffers and the House rallied together to take up a very important cause for their constituency,” Bianco said.

Like chemotherapy, radioimmunotherapy drugs treat and kill cancer cells, but they use radioactive material to do so. Bianco said Congress responded to the vast patient and physician outcry against CMS’s decision.

CMS and pharmaceutical companies are working together to conceive a fair reimbursement when the act of Congress expires in six months. Bianco said he was confident the outcome would be positive.

Creating Scarcity

The CMS reimbursement cut could have made radioimmunotherapy drugs scarce not only for Medicare and Medicaid patients, but also for those with private insurance, said Dr. Joseph Bailes, chair of the government relations council for the American Society of Clinical Oncology.

“The hospitals may not be willing to carry the drug [at all] if Medicare is not going to completely reimburse their cost, which makes sense, if you think about it,” Bailes said.

Moreover, the decision could have affected private insurers’ coverage of radioimmunotherapy drugs because some companies base their payments on CMS’s.

Radioimmunotherapy manufacturers and the pharmacists who supply the drug to hospitals are now working to educate CMS on the matter.

CMS Ignored Transaction Costs

Bianco explained the issue arose because of the way CMS assesses drug costs. Because radioimmunotherapy drugs are radioactive, the process of transporting them from the manufacturer to the pharmacy to the hospital is more expensive than the simple cost to create the drug–a factor CMS had not fully assessed, Bianco said.

Before, CMS developed the cost-to-charge ratio of drugs by looking at each individual hospital and then reimbursing accordingly, Bianco said, “and that’s cumbersome.”

Consequently, the average CMS reimbursement price fell below the actual acquisition price. Now, radiopharmacies and manufacturers are working with CMS to agree on a policy that accurately reflects the market price by setting an average selling price (ASP), Bianco explained, which would be easier for hospitals and would ensure the drug is available to patients.

For patients, the new assessment means continued access to a therapeutically effective, cost-effective treatment, said Bianco.

Consumer Control Needed

While steps are being taken to provide more reimbursement, not everyone agrees this move is sufficient.

CMS patients could be better served if they had more power over their allotted health care money, said Sue Blevins, president of the Institute for Health Freedom, a Washington, DC-based organization focusing on patients’ freedom to choose their health care with their doctor.

Decisions made by CMS and Congress, Blevins said, continue centralized health care decision-making instead of fostering individual choices. Decisions made by politicians cannot represent every CMS patient’s views–which will become a bigger problem as the feisty, freedom-loving generation of baby boomers makes their way into Medicare, as has already begun.

“My concern is that the decisions that are made are big, and they affect so many people, and they’re often political,” Blevins added. “I really hope that CMS will consider trying to figure out ways and strategies to allow people to take their Medicare money and buy plans where patients will have more freedom to make decisions with the doctor.”

Jillian Melchior ([email protected]) writes from Michigan.