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Photographer: Saul Loeb/AFP via Getty Images

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Medicare Expands Its Coverage of Costly Cancer Breakthrough

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Medicare Expands Its Coverage of Costly Cancer Breakthrough

  • Novartis, Gilead blood cancer drugs to be covered nationwide
  • CMS will pay for all facets of care done in or out of hospital
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Photographer: Saul Loeb/AFP via Getty Images

The U.S. government will expand payment nationwide for breakthrough blood-cancer treatments from Novartis AG and Gilead Sciences Inc. whose use has by stymied by uneven reimbursement from federal health programs.

The Centers for Medicare and Medicaid Services said Wednesday that the move is part of a new policy to standardize how patients get access to therapies, ensure widespread coverage and help hospitals better offset the substantial cost that can come with administering them.

The rule requires careful monitoring of the treatments for safety, and will only apply to facilities that are participating in programs to track long-term results. The government also agreed to pay for the therapies in some uses that haven’t officially been approved, but that CMS-backed experts have found are medically acceptable.

“It’s important for our beneficiaries to have access to the latest treatments and therapies,” CMS Administrator Seema Verma said in a conference call with reporters. “This is lifesaving treatment for people who really don’t have any other options.”

The decision by the agency ends months of uncertainty for drug manufacturers and hospitals that administer the treatments, which are known as CAR-T, and confusion among the patients who need them. Because there had been no national Medicare policy, local Medicare administrative contractors have had discretion over whether to pay for them.

CAR-T therapies are individually tailored to patients and have generated striking results, helping deathly ill people with cancer get into remission. Immune-system cells are removed from the blood, engineered to recognize and destroy cancer, then returned to target the malignancies.

They’re also expensive. Novartis’ Kymriah is priced at $475,000 for children with acute lymphoblastic leukemia that hasn’t responded to traditional treatment, a rare condition. Kymriah and Gilead’s Yescarta cost $373,000 when used for another type of cancer, advanced diffuse large B cell lymphoma.

CMS hasn’t yet set a price that it will pay for the treatments, and instead will cover 65% of a hospital’s costs, Verma said. They can also apply for an additional outlier payment, offered for some new breakthrough therapies that have steep price tags. Between the two payments, some hospitals are getting close to the average sales price of the drug, she said.

“This whole issue of CAR-T is really bringing up the issue of how expensive the new therapies that are coming out are,” Verma said. “While they are lifesaving and they are transformative, and we haven’t seen this type of development before in terms of a curative treatment, I do think it’s sort of begging the question how is the system going to pay for this over the long term.”

Other companies working on CAR-T treatments include Celgene Corp., Bluebird Bio Inc., Johnson & Johnson and AbbVie Inc.

(Adds CMS comment in fourth and ninth paragraphs.)