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PROKINE (GM-CSF) REIMBURSEMENT EXPECTED TO BE "STRAIGHTFORWARD"

Executive Summary

PROKINE (GM-CSF) REIMBURSEMENT EXPECTED TO BE "STRAIGHTFORWARD" since the drug is used as part of an inpatient surgical procedure, Hoechst-Roussel Pharmaceuticals advised physicians and third party payors in its reimbursement manual for the white cell growth factor. "Interviews suggest that reimbursement for Prokine's labeled indication of autologous bone marrow transplantation (AuBMT) will be straightforward," the manual states. Prepared by the San Francisco-based Technology Assessment Group, which is providing reimbursement assistance for the product, the manual informs physicians that the transplant "procedure is authorized prior to treatment, so that the payor knows precisely what total costs will be" and that "Prokine (sargramostim) should be listed as part of the treatment protocol in preauthorization requests." Reimbursement denials "are expected to be based on the payor's unwillingness to cover the AuBMT procedure for a particular diagnosis rather than for Prokine," the manual maintains. The guide also points out that under Medicare all bone marrow transplantations are covered under a single diagnosis-related group classification, which in October 1990 replaced four preexisting DRGs used to code the transplants. Included in the DRG are autologous bone marrow transplants for acute leukemia, resistant non-Hodgkin's lymphoma, advanced Hodgkin's disease and recurrent or refractory neuroblastoma. The first three conditions are approved Prokine indications. The DRG provides a single payment covering all services delivered during the inpatient stay. Hoechst's Prokine, which is the same as Immunex's Leukine although marketed separately, was launched in the latter part of March following a March 5 approval ("The Pink Sheet" March 11, p. 15). Immunex also has a reimbursement assistance program. Cost- effectiveness data on GM-CSF, as well as on Amgen's Neupogen (G- CSF) approved in February, has yet to be published. The delay in availability of biotechnology product cost- effectiveness data to third party payors was the subject of comments made by California-based CAPP Care Medical Director Harvey Eichner, MD, at the April 8 National Managed Health Care Congress in Washington, D.C. "We don't get any information on cost effectiveness until the product is out on the market and is being used and cost information comes from other sources," Eichner said. "You might get information about the cost of the product but we don't get the information about how the product fits in to an overall treatment regimen and how much money is being saved or cost of treating the particular illness." Since there is no requirement to provide cost-effectiveness data, Eichner claimed that "it is available from the company [only] when the product is good in comparison to the competition." He suggested the there is a need for "more independent evaluations of a company's product, particularly in the early phases when products are being reviewed." At the meeting, Hoechst Oncology and Biologics Clinical Director Dagmar Oette, MD, explained that the company has not released cost-effectiveness data on GM-CSF because of a "confidentiality battle." Oette said Hoechst "can't publish those data because there are concerns that the average cost that came out of these studies is too low." The cost of treatment calculated by Hoechst apparently came out lower than that estimated by the bone marrow transplantation centers. "Each of the institutions is negotiating with [third party payors] and the referral centers . . . for bone marrow transplants at a cost that might be a little different than the average cost" determined by the cost- effectiveness study, Oette said. In the meantime, the BMT institutions are opposing release of the study results.

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