NPC Submits Comments on Hospital Prospective Payment System and Proposed Policy Changes

NPC logo

June 21, 2019

The Honorable Seema Verma
Administrator, Centers for Medicare and Medicaid Services
Department of Health and Human Services
7500 Security Boulevard
Baltimore, MD 21244

Submitted electronically via http://www.regulations.gov

RE: Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Proposed Policy Changes and Fiscal Year 2020 Rates; Proposed Quality Reporting Requirements for Specific Providers; Medicare and Medicaid Promoting Interoperability Programs Proposed Requirements for Eligible Hospitals and Critical Access Hospitals [CMS-1716-P]

 

Dear Administrator Verma:

The National Pharmaceutical Council (NPC) appreciates the opportunity to submit comments regarding the Centers for Medicare and Medicaid Services (CMS) notice of proposed rulemaking Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Proposed Policy Changes and Fiscal Year 2020 Rates; Proposed Quality Reporting Requirements for Specific Providers; Medicare and Medicaid Promoting Interoperability Programs Proposed Requirements for Eligible Hospitals and Critical Access Hospitals (“IPPS”). NPC supports the agency’s continued efforts to ensure that beneficiaries have access to new, innovative technologies, particularly through provisions in the proposed rule related to the New Technology Add-on Payment policies.

NPC is a health policy research organization dedicated to the advancement of good evidence and science and to fostering an environment in the United States that supports medical innovation. NPC is supported by the major U.S. research-based biopharmaceutical companies. We focus on research development, information dissemination, education and communication of the critical issues of evidence, innovation and the value of medicines for patients. Our research helps inform important health care policy debates and supports the achievement of the best patient outcomes in the most efficient way possible.

Our comments focus on the following:

  • The request for feedback on the substantial clinical improvement criteria for New Technology Add-on Payment (NTAP) applications
  • The proposal to deem Breakthrough Devices a substantial clinical improvement for the purposes of the NTAP program
  • The proposal to increase NTAP reimbursement to encourage adoption of and access to new medications

CMS Should Broaden Use of Clinical Data Considered in NTAP Applications

The New Technology Add-on Payment (NTAP) program is an important avenue for some pharmaceutical products as they enter the market. NTAP status can be helpful in achieving beneficiary access to innovative therapies and encouraging utilization of valuable, life-saving drugs.

Biopharmaceuticals are a key factor in improvements in patient outcomes.

Pharmaceutical products have been an important tool in achieving positive health outcomes for patients of a variety of ages and with a variety of conditions for decades. For example, investments made 20 years ago in fighting the worst diseases of the day have paid off. Six of the top seven causes of death and disability in 1995 have seen significant improvement in patient outcomes. Findings from a physician survey indicated that pharmaceutical and biopharmaceutical products were viewed as accounting for the greatest impact on mortality and morbidity across these top conditions since 1990.[1] Pharmaceuticals in that period and beyond represent significant advances in treatment for diseases and conditions such as cerebrovascular diseases, HIV, hepatitis C, and others.

In light of this, it is critical to design reimbursement policies that encourage the utilization of pharmaceutical products that represent improvements in treatment and standard of care for patients facing debilitating and sometimes deadly medical conditions. Additional spending to treat the most critical causes of death and disability over the past 20 years have been found to be cost-effective and a source of value creation.[2] Using high-value pharmaceuticals may allow for better and more efficient care in less-costly settings or lower-cost treatments in the future. Furthermore, policies that recognize the benefits of new innovative technologies can encourage future investment in these innovations.

Providing additional guidance on the substantial clinical improvement criterion for NTAP will help applicants as they consider submission of an application and may ultimately lead to better patient access. Additional guidance will help manufacturers when determining whether or not to prepare and submit an application for consideration and will also enable agency staff to consider applications in a consistent manner. Manufacturers could even take the guidance into consideration when designing clinical trials, identifying patient populations and endpoints.

Real-world data, evidence, and endpoints should be considered, but not required, when determining “substantial improvement.”

Many payment and coverage decisions, including NTAP, frequently focus on the evidence gathered from randomized controlled clinical trials (RCTs). While RCTs offer important insight into the efficacy of a drug, NPC believes that other types of evidence, in particular real-world evidence (RWE), are appropriate for incorporation into coverage decisions, including NTAP status.

Recently, in response to provisions of the 21st Century Cures Act, the Food and Drug Administration (FDA) released the Framework for FDA’s Real-World Evidence Program as a guide for how to evaluate RWE used to support applications submitted to the agency. The FDA believes that “real-world evidence provides us with a potential source of information that can complement, augment and expand our understanding of how best to use medical products—improving what we know about our medical care,”[3] a view shared by NPC. In public comments submitted in response to this framework, NPC notes that RWE and real-world data (RWD) can provide meaningful insight, helping to advance clinical knowledge when utilized correctly.[4]

Just as the FDA is evolving in their use of real-world data, we encourage CMS to adopt a similar stance on the broader use of real-world evidence and data, including in NTAP applications. Clinical trial design can vary depending on the drug and affected patient population. For many populations and treatments, RWE may not be available until there is sufficient use. For orphan disease populations, historical or retrospective real-world data can be beneficial when there are few patients to sample from or an RCT is not the most feasible or ethical design option. These retrospective studies or historical control arms are often used to support applications submitted to the FDA and, once the drug is approved, in applications submitted for NTAP consideration. Furthermore, these studies can provide valuable insight into how a drug performs, particularly compared to past treatments. By considering this data and other real-world evidence, NPC believes CMS can further its goal of facilitating patient access to innovative technologies.

Beyond the FDA, other stakeholders are beginning to use RWE to better understand how certain treatments work across care settings and more diverse populations. Real-world evidence can also be a useful tool as the health care environment shifts to a more value-based system with a focus on care coordination, quality of care, and risk sharing.[5] In a payer roundtable convened by NPC, participants noted the value of RWE to fill in information gaps for payment and coverage. Similarly, RWE can provide a deeper understanding of how certain patient populations that differ from clinical trials due to age, race or ethnicity are affected by a new innovative treatment in typical care settings.

Incorporating real-world evidence into the NTAP substantial clinical improvement criteria would provide valuable insights into the benefit these technologies can provide to Medicare beneficiaries and the providers treating them. Further, NPC believes that using RWE is a key component of a value-based health care system and should be incorporated into coverage and payment decisions for programs like NTAP, pass-through, and others. As stated in our Guiding Practices for Patient-Centered Value Assessment, stakeholders should be allowed to submit real-world evidence and “best available evidence” to ensure that the evidence base is comprehensive.[6]

NPC is encouraged by CMS’ consideration of the substantial clinical improvement criteria and suggests the agency explore additional avenues for incorporating real-world evidence.

Evidence should include, but not require peer-review publication.

NPC supports the proposed policy to address the impression that peer-review publication is useful, but not required for the agency to find that a new technology meets the requirement for substantial clinical improvement. Biopharmaceutical manufacturers should be allowed to submit relevant evidence, such as clinical trials and real-world evidence beyond the published literature. Evidence evolves throughout product development and over time. Often, pertinent evidence may not yet be available in the published literature and should be considered in the evaluation of substantial clinical improvement.[7],[8]

Substantial clinical improvement should consider heterogeneity of treatment response and incentives should consider when “one-size-does-not-fit-all.”

NPC supports the consideration of a technology meeting the substantial clinical improvement criterion by demonstrating a substantial improvement for any subset of beneficiaries regardless of size. A treatment that is best for most patients may not be the one that is right for an individual. Some patients may have their condition successfully treated while other patients experience no benefits or even harms from the same treatment. Previous NPC research has demonstrated variations in treatment responses in certain subpopulations. These subpopulations include racial and ethnic groups as well as the elderly, a key subpopulation among Medicare beneficiaries.[9],[10]

Reimbursement incentives for technology and devices based on “average” treatment response may restrict patient access to the treatment option most effective for him or her. NPC and other organizations have conducted extensive research examining heterogeneity of treatment effect (HTE) and the policy implications of a one-size-fits-all approach for coverage and reimbursement. For example, an analysis of a comparative effectiveness research trial for antipsychotic drugs, one of the six protected classes, in the Medicaid program found that restrictive reimbursement for “losing” drugs would increase overall costs by $1.3 billion and worsen conditions for mental health patients due to heterogeneity.[11],[12] Quality in health care delivery, measured by patient outcomes, cannot be achieved unless we acknowledge individual treatment response and provide incentives for these personalized innovations accordingly.

Product uptake occurs over time and steady-state utilization to inform payment amounts may require additional time.

We also suggest that manufacturers who collect real-world evidence following FDA approval be given credit for that investment through extension of NTAP eligibility beyond the initial two to three years. Only one-quarter of all products reach a saturation point within the first five years of the product’s launch.[13] Because uptake in the first year after a product launch is typically lower than in subsequent years, it might take Medicare payment amounts longer to account for the cost of new technologies than the initial two to three years that a product is on the market. This is especially true for new treatments used in limited patient populations that are too large to qualify under the existing outlier payment program, but not quite large enough to have a meaningful impact on the overall MS-DRG payment. We urge CMS to consider a voluntary demonstration program where a manufacturer could earn time credits to delay application of NTAP after launch by performing post-marketing studies to gather RWE. 

CMS Should Expand the NTAP Proposal for Breakthrough Devices to Include Breakthrough Therapies

In keeping with the agency’s desire to accelerate access to new technologies, CMS proposes that new medical devices receiving marketing authorization through the Breakthrough Device Program would automatically meet the NTAP criterion of being new and not substantially similar to another device for enhanced inpatient payments. CMS would also waive the substantial clinical improvement criterion for these devices but would still require applicants to meet the cost criterion for the NTAP program.

The substantial clinical improvement criterion can often be challenging for manufacturers due to the limited guidance available on how to meet this requirement. NPC supports the idea behind this policy proposal. However, NPC requests that CMS expand this policy to include drugs that have also received Breakthrough Therapy designation from the Food and Drug Administration (FDA).

Similar to the Breakthrough Devices designation, the Breakthrough Therapy designation for pharmaceutical products requires that drugs meet certain requirements, including the following:

  • Treats a serious or life-threatening disease or condition either alone or in combination with one or more other drugs and
  • Preliminary clinical evidence indicates the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints.[14]

Therefore, by definition, the FDA has already determined that the drug may demonstrate a substantial improvement over therapies on the market. Pharmaceutical products continue to represent significant innovations in the health care market and regularly make up a significant portion of NTAP applications each year. By deeming Breakthrough Therapies to also be a substantial clinical improvement for the purposes of NTAP, CMS will help to ensure that Medicare beneficiaries and their providers have access to the most innovative and clinically appropriate course of treatment.

CMS Should Raise the NTAP Reimbursement Level to Encourage Adoption of and Access to New Technologies

In the IPPS rule, CMS also proposed to increase the payment threshold for NTAP-eligible products to the lesser of:

  • 65 percent of the cost of the new technology or service, or
  • 65 percent of the amount by which the costs of the case exceed the standard DRG payment.

NPC appreciates CMS’ action on adjusting the payment threshold for NTAP. Often, the 50 percent add-on for NTAP does not adequately reflect the cost of life-saving therapies, such as CAR-T therapies, disincentivizing the use of these new technologies. We support increasing the threshold from the current level of 50 percent and encourage CMS to implement a policy that has just one level of payment instead of choosing from the lesser of multiple options in order to provide clarity to hospitals and others as to the ultimate reimbursement level for an NTAP-eligible product. Finally, we support raising the NTAP reimbursement level sufficiently to encourage the adoption of new technologies.

Conclusion

NPC appreciates the opportunity to provide feedback in response to the agency’s request on the substantial clinical improvement criterion under the NTAP policy. We encourage the agency to provide further guidance to applicants on how to meet this criterion, particularly through the incorporation of real-world evidence. To further the agency’s goal of expanding access to new, innovative technologies, we also encourage CMS to expand their proposal to deem Breakthrough Devices new and a substantial clinical improvement to drugs given Breakthrough Therapy status from the FDA and to ensure sufficient reimbursement to not impede the adoption of and access to critical new technologies.

We hope to continue this important discussion with CMS and other stakeholders and would be happy to meet to expand upon our comments and share our research. Thank you for the opportunity to provide these comments.

 

Respectfully submitted,

 

Dan Leonard, MA
President and Chief Executive Officer
National Pharmaceutical Council

 

Jennifer S. Graff, PharmD
Vice President, Comparative Effectiveness Research
National Pharmaceutical Council

 

 

[1] Wamble D, Ciarametaro M, and Dubois R. The Effect of Medical Technology Innovations on Patient Outcomes, 1990-2015: Results of a Physician Survey. Journal of Managed Care & Specialty Pharmacy. 2019; 25(1): 66-71.

[2] Wamble D, Ciarametaro M, Houghton K, Ajmera M, and Dubois R. What’s Been the Bang for the Buck? Cost-Effectiveness of Health Care Spending Across Selected Conditions in the US. Health Affairs. 2019; 38(1): 68-75.

[3] Framework for FDA’s Real-World Evidence Program. U.S. Food & Drug Administration. December 2018.

[4] NPC Submits Comments on FDA Framework for a Real-World Evidence Program; Availability. National Pharmaceutical Council. February 5, 2019. Available at https://www.npcnow.org/newsroom/commentary/npc-submits-comments-fda-framework-real-world-evidence-program-availability. Accessed June 12, 2019.

[5] Sabharwal RK, Graff JS, Holve E, Dubois RW. Developing Evidence That is Fit for Purpose: A Framework for Payer and Research Dialogue. The American Journal of Managed Care. 2015; 21(9): e545-e551.

[6] Guiding Practices for Patient-Centered Value Assessment. National Pharmaceutical Council. https://www.npcnow.org/guidingpractices. Accessed June 12, 2019.

[7] Ibid.

[8] Drummond MF, Schwartz JS, Jonsson B. Key Principles for the Improved Conduct of Health Technology Assessments for Resource Allocation Decisions. International Journal of Technology Assessment in Health Care. 2008; 24(3): 244-258.

[9] Wertheimer A. Pharmaceuticals for Elders: Why Innovation Matters. Healthcare and Aging. 2002; 9(1). Available at  https://www.npcnow.org/system/files/research/download/Pharmaceuticals-for-Elders-Why-Innovation-Matters-1.pdf. Accessed June 12, 2019.

[10] Burroughs VJ, Maxey RW, and Levy RA. Racial and Ethnic Differences in Response to Medicines: Towards Individualized Pharmaceutical Treatment. Journal of the National Medical Association. 2002;94 (10 Suppl): 1-26. Available at https://www.npcnow.org/publication/racial-and-ethnic-differences-response-medicines-towards-individualized-pharmaceutical. Accessed June 12, 2019.

[11] Philipson TJ, Sun E. Blue Pill or Red Pill: The Limits of Comparative Effectiveness Research. The Manhattan Institute for Policy Research. June 28, 2011. Available at https://www.manhattan-institute.org/html/blue-pill-or-red-pill-limits-comparative-effectiveness-research-6012.html. Accessed June 12, 2019.

[12] Basu A, Jena AB, and Philipson TJ. The impact of comparative effectiveness research on health and health care spending. Journal of Health Economics. 2011; 30(4): 695-706.

[13] Lifetime Trends in Biopharmaceutical Innovation: Recent Evidence and Implications. January 10, 2017. Available at https://www.iqvia.com/institute/reports/lifetime-trends-in-biopharmaceutical-innovation-recent-evidence-and-implications. Accessed June 12, 2019.

[14] Fact Sheet: Breakthrough Therapies. Food and Drug Administration. Available at https://www.fda.gov/regulatory-information/food-and-drug-administration-safety-and-innovation-act-fdasia/fact-sheet-breakthrough-therapies. Accessed June 12, 2019.