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MEDICARE COVERAGE OF TREATMENT IND DRUGS SUGGESTED BY HHS

Executive Summary

MEDICARE COVERAGE OF TREATMENT IND DRUGS SUGGESTED BY HHS in a recently released report. Entitled "Medicare Coverage for Investigational Drugs: Exploring the Options," the report suggests that "Medicare could modify its exclusive reliance for coverage on FDA marketing approval for drugs and defer to FDA's designation of Treatment IND drugs as it does for Group C cancer drugs," the report suggests. The report bases its conclusions on "an analysis of existing regulatory policy, experience to date with the use of investigational drugs for widespread treatment, and a review of the issues associated with insurance coverage for investigational therapies." Supported by the HHS Office of the Assistant Secretary for Planning and Evaluation, the report was developed in consultation with an outside advisory group. It was completed last June and forwarded to Secretary Sullivan but was not publicly released until late October. The study concludes that "expanded coverage by Medicare for selected investigational drugs likely would have limited immediate impact on expenditures, although coverage for investigational drugs could set a precedent for coverage of investigational devices and procedures." However, the document notes that "Treatment IND drugs are a formal intermediate category between clinical investigation and marketing approval. No comparable designation exists for devices or for medical procedures." Originally required by the defunct Medicare Catastrophic Care Act of 1988, the study was picked up by HHS because the department considered the analysis relevant to current coverage issues. The discrepancy between FDA and HCFA approaches to Treatment INDs has led to requests that the reimbursement policy be reassessed, the report notes. "While the FDA has taken steps to make drugs more widely available prior to approval for marketing," the report says, the Health Care Financing Administration "will only cover items and services (with the exception of Group C cancer drugs) that have been proven safe and effective based on authoritative evidence, or that are generally accepted in the medical community as safe and effective. HCFA does not cover drugs that FDA has permitted to be made available for treatment purposes but are still considered experimental." As a result, "certain patients and providers, particularly those dealing with cancer and AIDS, are demanding a change to the Medicare coverage policy for investigational drugs," the report points out. The report discusses several other options for coverage of investigational drugs, including maintenance of Medicare's current policy of covering only Group C drugs; expanding coverage to include selected investigational drugs, either on a drug-by-drug basis as a national coverage policy, or on a patient-to-patient basis at the discretion of local contractors; and elimination of coverage for Group C drugs. Whether any changes are made to Medicare and other third-party coverage policies, the report says FDA should "clarify the circumstances under which an investigational drug that is not a Treatment IND drug may be available for treatment use." In addition, the report says that the National Cancer Institute, FDA and HCFA "should resolve their different perceptions" about Group C cancer drugs. "If it is agreed that Group C drugs are equivalent to Treatment IND drugs, then HCFA should consider making consistent its coverage policy, which now distinguishes between these two categories." The classification of Group C cancer drugs was developed by NCI and FDA in the mid-1970s to designate drugs with extensive safety and efficacy data in the late stages of development that could be made available outside clinical trials. The study was conducted in consultation with an advisory board made up of representatives from the American Medical Association, Blue Cross/Blue Shield Association, Health Insurance Association of America, the Pharmaceutical Manufacturers Association, the American Association of Retired Persons and other medical groups. An interdepartmental working group representing FDA, NIH, NCI and HCFA, also participated.
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