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Dendreon’s $93,000 Drug Cost Must Be Paid, Group Says

Updated on
Cell separation process of Dendreon Corp.'s Provence vaccine for prostate cancer. Source: Dendreon Corp. via Bloomberg
Cell separation process of Dendreon Corp.'s Provence vaccine for prostate cancer. Source: Dendreon Corp. via Bloomberg

Aug. 2 (Bloomberg) -- Dendreon Inc.’s $93,000 price tag for its Provenge prostate cancer treatment must be covered under the rules of the U.S. Medicare health plan, according to a letter submitted by the American Society of Clinical Oncology.

The Centers for Medicare & Medicaid Services, the government agency that determines which treatments will be reimbursed, is required by the Social Security Act to pay for all cancer drugs approved by U.S. regulators, the cancer society said in a public letter submitted to the agency.

Provenge won marketing rights in the U.S. in April, becoming the first drug designed to train the body’s immune system to fight cancer. Medicare, the government’s health plan for the elderly and disabled, routinely pays for medicines once they’ve been approved regardless of price. The agency initiated a yearlong internal review on June 30 to determine whether Provenge should be an exception.

“We are concerned that CMS may have plans to examine the issue of whether to cover this therapy for its FDA-approved indications,” the Alexandria, Virginia-based cancer society said in a letter posted on a CMS website for public comments. “This would be both counter-productive and ill-advised.”

Dendreon rose 93 cents, or 2.9 percent, to $33.84 at 4 p.m. New York time in Nasdaq Stock Market composite trading. The stock has declined 33 percent since the drug was approved on April 29.

28,000 Doctors

The American Society of Clinical Oncology represents 28,000 cancer doctors and medical practitioners. The group holds the world’s biggest annual meeting devoted to cancer drug research.

Treatment with Provenge costs about $93,000 for three doses administered over the course of a month. The medicine helped patients live about 4.1 months longer than those given a placebo, according to tests used to gain approval.

Before the review was announced, Don McLeod, an agency spokesman, said Provenge would almost certainly be covered by Medicare. He declined to comment today on the review.

The agency doesn’t typically make formal determinations on cancer drugs. Instead, it pays claims through the local contractors who administer payments.

“Under any scenario, we urge CMS to provide clear public statements regarding Medicare’s current policies governing the coverage of this therapy,” ASCO said in the comments to Medicare. “Ambiguity and uncertainty regarding coverage policies can act as an unacceptable barrier to medically necessary care.”

To contact the reporter on this story: Tom Randall in New York at trandall6@bloomberg.net.

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net.

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