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Medicare Coverage of CAR-T Cell Therapy Raises New Questions

October 28, 2019

The Trump administration’s greenlighting of CAR-T cell cancer therapy for Medicare patients nationwide put an end to the patchwork of local determinations on the use of the innovative and expensive treatment.

Still to be determined is how hospitals and other health care facilities will be reimbursed for the therapy and whether patients will have access to the therapy under health care proposals such as Medicare for All or a so-called public option.

One of the most promising cancer treatments to come along in years, CAR-T cell therapy uses the body’s own immune system to attack and kill cancer cells. The treatment involves bioengineering T cells, a white blood cell that fights foreign substances in the body, and equipping them with new Chimeric Antigen Receptors that target cancer cells.

CAR-T cell therapy has been approved by the U.S. Food and Drug Administration (FDA) for children with leukemia and adults with advanced lymphoma. The therapy is typically used alongside other, more traditional treatments such as surgery, chemotherapy, and radiation. Its use in combatting other forms of cancer is pending with the FDA, an agency known for its slow approval process.

Hefty Price Tag

There are currently two approved CAR-T treatments: Novartis’ Kymriah (tisagenlecleucel) and Gilead’s Yescarta (axicabtagene).

Like most newly introduced cutting-edge treatments, the two products come with a hefty price tag. A course of treatment of Kymriah costs $475,000 for pediatric and young adult patients with leukemia, and both are priced at $373,000 to treat lymphoma in adults, according to biopharma.com. Under Centers for Medicare & Medicaid Services (CMS) regulations published in August, Medicare will reimburse hospitals for 65 percent of the treatment’s cost, or about $242,000, through Part B.

Although hospitals will likely welcome Medicare’s financial commitment, there still remains a sizable gap. Further complicating reimbursement is the lack of a separate Medicare billing code for CAR-T treatment, which will be handled via codes for bone marrow and stem cell transplants until a CAR-T billing code is developed, which could take up to three years.

CMS worked closely with the FDA and the National Cancer Institute in developing the new regulations, a time-consuming process rooted in the complexities of developing a reimbursement scheme and overseeing an innovative and evolving therapy.

At a July 31 Heritage Foundation panel discussion on Medicare for All, CMS Administrator Seema Verma discussed the challenges government programs face in approving innovative treatments.

“Much of the problem is when Congress says you can cover durable medical treatment, supplies, and drugs,” said Verma. “Sounded great when they wrote that law 30 to 40 years ago but doesn’t make sense in today’s environment. All of these new treatments are coming out, and they don’t fit nicely into the way the law has been constructed, and it creates problems for the agency.”

Bonner R. Cohen,  Ph.D., (bcohen@nationalcenter.orgis a senior fellow at the National Center for Public Policy Research and a senior policy analyst with the Committee for a Constructive Tomorrow (CFACT).

Author
Bonner R. Cohen is a senior fellow with the National Center for Public Policy Research, a position he has held since 2002.
bcohen@nationalcenter.org