NPC Comments on Medicare Program; Medicare Coverage of Innovative Technology, Definition of “Reasonable and Necessary”

November 2, 2020

Seema Verma
Centers for Medicare & Medicaid Services
U.S. Department of Health and Human Services
200 Independence Ave S.W.
Washington, DC 20201

Submitted via https://www.regulations.gov

RE: Medicare Program; Medicare Coverage of Innovative Technology (MCIT) and Definition of “Reasonable and Necessary”

Dear Administrator Verma,

Thank you for the opportunity to comment on the proposed rule Medicare Coverage of Innovative Technology (MCIT) and Definition of “Reasonable and Necessary,” which proposes to establish a Medicare coverage pathway for medical devices designated as breakthrough by the Food and Drug Administration (FDA). 

The National Pharmaceutical Council (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 sustainable 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 address the following points:

• Biopharmaceuticals are a Key Factor in Improvements in Patient Outcomes
• Recent Policies to Encourage Innovation for Patients are a Good First Step
• Efforts to Establish More Consistent Coverage Pathways for Devices Designated as Breakthrough by the FDA Should be Mirrored with Policies to Establish More Consistent Reimbursement for Breakthrough Therapies
• Codification of Reasonable and Necessary Should Rely on More Deliberate Stakeholder Input

Biopharmaceuticals are a Key Factor in Improvements in Patient Outcomes

Pharmaceutical products have been an important tool in achieving positive health outcomes for patients with a variety of conditions for decades. Investments made 20 years ago to combat the worst diseases of the day continue to pay-off. Six of the top seven causes of death and disability in 1995 have seen significant improvement in patient outcomes associated with these investments. 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. 

Additional spending to treat the most critical causes of death and disability over the past 20 years is 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. Policies that recognize the benefits of new innovative technologies can encourage future investment in these innovations. 

Recent Policies to Encourage Innovation for Patients are a Good First Step

NPC is encouraged by CMS’ actions to implement the Executive Order, Executive Order on Protecting and Improving Medicare for Our Nation’s Seniors,[3] which directs the federal government to adopt regulations for Medicare “to encourage innovation for patients.” NPC supports developing coverage policies for devices and payment policies for drugs that promote innovation and patient access to innovative new products. 

While NPC believes policies are needed to promote access to innovative devices, we do not support expanding the MCIT pathway to drugs and biologics. Innovative devices with FDA breakthrough designation have coverage challenges, while innovative biopharmaceuticals meeting a similar FDA designation criterion have different challenges to ensure sufficient reimbursement. Our comments focus on the reimbursement — and not coverage — incentives needed to ensure adequate payment for and access to these innovative and breakthrough biopharmaceuticals. 

NPC was encouraged by CMS’ recent adoption of a new alternative pathway for Qualified Infectious Disease Products (QIDPs) applying for New Technology Add-on Payment (NTAP) status.[4] Additionally, the creation of a new Medicare Severity-Diagnosis Related Group (MS-DRG) to ensure more appropriate payment for procedures involving CAR T-cell therapies helps bridge the payment gap for innovative technologies by creating a more permanent and stable reimbursement. NPC encourages CMS to continue to develop and adopt policies that will promote innovation and ensure adequate reimbursement and, ultimately, access to necessary treatments rather than individual policies. 

Efforts to Establish More Consistent Coverage Pathways for Devices Designated as Breakthrough by the FDA Should be Mirrored with Policies to Establish More Consistent Reimbursement for Breakthrough Therapies

As CMS considers policies for Breakthrough Devices, we encourage the agency to mirror their efforts to ensure timely and effective reimbursement of innovative new pharmaceutical therapies, including those designated as a Breakthrough Therapy by the 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.[5]

Devices with marketing authorization through the Breakthrough Device program automatically meet the NTAP criterion for substantial clinical improvement. As we recommended in our comments on the Fiscal Year 2020 Inpatient Prospective Payment System proposed rule, these policies should expand to include drugs that have also received Breakthrough Therapy designation.[6] By deeming Breakthrough Therapies designated by the FDA as meeting the substantial clinical improvement for the purposes of NTAP, CMS will help ensure reimbursement policies for innovative and clinically appropriate treatments do not hinder access for providers and Medicare beneficiaries.

Codification of Reasonable and Necessary Should Rely on More Deliberate Stakeholder Input

CMS outlined a proposed modification to “reasonable and necessary” in response to the medical device industry request for greater clarity. It is unclear whether the scope of the definition for “reasonable and necessary” would include both devices and pharmaceutical products. Coverage policies for drugs and devices may have different challenges. Further, any changes to the definition of reasonable and necessary could have important implications for patient access to needed treatments. For these reasons, we suggest CMS allow for separate stakeholder dialogue and input to ensure that any changes will not lead to unintended consequences for patients. 

Pharmaceutical products continue to represent significant innovations in the health care market, offering patients, caregivers, and providers effective treatments that produce significant clinical outcomes. Payment structures and incentives designed to promote patient access are crucial as new and innovative curative therapies come to market.

We appreciate CMS’ acknowledgment of the role of innovation represented by new technologies coming to market and encourage the agency to continue supporting further innovation across the health care landscape.

Sincerely,

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

References:

[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] Executive Order 13890. October 3, 2019.

[4] 42 CFR § 412.87.

[5] 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.

[6] 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]. Available at: https://www.npcnow.org/newsroom/commentary/npc-submits-comments-hospital-prospective-payment-system-and-proposed-policy