The Value of Knowing: CMS Rejects Coverage of Lilly’s Amyvid – Except As Tool For Further Research

CMS is proposing to deny coverage of Lilly’s Alzheimer’s “rule-out” diagnostic Amyvid. The decision is important for biopharma manufacturers for several reasons, both as a demonstration that the agency really will refuse to pay for FDA approved drugs—and for how CMS thinks it can actually use its authority to encourage research on effective AD therapies.

The Centers for Medicare & Medicaid Services is proposing only very limited coverage for Lilly’s recently launched diagnostic agent Amyvid, concluding that the evidence does not support routine payment for use of the scan to rule out Alzheimer’s in patients with early signs of dementia.

The proposed coverage decision limits payment for the scan solely to use in clinical trials that are intended to demonstrate the value of the test in some tangible measure of clinical utility – or to enrich a patient population for development of a potential therapeutic. (Also see "CMS Denies Lilly’s Request For Broad Medicare Coverage Of Amyvid In Draft Memo" - Pink Sheet, 8 Jul, 2013.)

The decision is clearly a disappointment for Lilly, with sales of the $1,600 test failing to gain much traction in the absence of Medicare payment. Lilly made a pretty big bet on the product, buying Avid for almost $350 million (the amount Lilly recorded as reflecting the up-front payment and fair value of potential earn-outs). The company has already written down a chunk of that purchase based on launch delays and lackluster sales.

But there are at least two reasons why everyone in the biopharma sector should take note of this decision.

• First and foremost, it is the clearest indication yet of a message CMS has been trying to send to anyone laboring under an important misperception about the rules of Medicare coverage: FDA approval does not automatically mean coverage under Part B.
• The second reason, however, may be more important in the long run: the decision offers an interesting test of whether and how CMS can use its coverage policy to encourage drug development. The decision allows coverage in clinical trials where the goal is not a direct demonstration of the value of Amyvid, but rather to improve the odds of success for a novel therapeutic for Alzheimer’s.

In fact, that second reason is a distinct silver lining for Lilly, since it at least opens up the possibility that CMS will cover use of the Amyvid test in the company’s planned Expedition 3 trial for a potential early stage Alzheimer’s therapeutic,

That is, however, scant comfort, and Lilly’s first priority will be to try to reverse CMS’ thinking before the policy is finalized in October. And Lilly won’t be alone: plenty of stakeholders in the Alzheimer’s community are rallying to urge CMS to reconsider.

However, even if CMS does reverse course and allow routine coverage, the message from the July 3 proposal bears repeating: CMS does not feel obliged to cover new drugs simply because they are FDA approved, but the agency does want to find creative ways to encourage development of therapeutics that it thinks will provide significant benefit to the Medicare population.

The Clearest Message Yet on Non-Coverage of FDA Approved Products

As a starting point, the draft decision memo should remove any doubt about CMS’ willingness to deny Medicare coverage for an FDA approved product.

The coverage group has been trying to make its discretion about covering FDA approved drugs as explicit as possible, both in public pronouncements and in the context of coverage analyses.

For biopharma sponsors, the issue burst onto the scene in the context of CMS’ review of the coverage of EPO in oncology six years ago—though there was plenty of room to debate what exactly the boundaries of the FDA label for the products was, compared to CMS’ proposed coverage policy. (Also see "Living in a Bipolar World: Implications of the EPO Safety Debate (Part 1) " - Pink Sheet, 1 Jul, 2007.) In that case, while CMS was arguably out front of FDA in restricting use, it is hard to argue that the coverage policy ended up clearly different than the FDA label. (Also see "Relabeling EPO: Closing the Books on a Safety Issue, Opening a New Chapter at FDA" - Pink Sheet, 1 Nov, 2007.)

In the case of Dendreon’s Provenge, CMS opened a coverage review immediately after approval which more explicitly raised the potential of non-coverage for the approved use in prostate cancer. (Also see "Dendreon vs. CMS:Controversy Is Bigger Than One Product" - Pink Sheet, 1 Jul, 2010.) At the end of the process, however, not only did CMS cover the approved label, it didn’t really put much restriction on off-label use either. (Also see "Medicare Will Cover Provenge Labeled Uses, CMS Proposes; Off-Label Is Up To Contractors" - Pink Sheet, 30 Mar, 2011.)

So, CMS may have said it won’t necessarily cover a drug for an FDA approved use, but it always has.

Until now – assuming it sticks to its guns when the proposed Amyvid policy is finalized in October.

Granted, this isn’t the same as denying coverage of an FDA approved cancer drug. Amyvid is regulated by FDA as a drug, but of course it is used as a diagnostic, and—more to the point—as part of diagnostic procedure involving a PET scan. Moreover, CMS already had a policy in place of blanket non-coverage for beta amyloid PET scans. In other words, Lilly was in the position of asking for coverage—rather than the more typical circumstances where CMS would be responding to a launch by considering whether to deny coverage. (Also see "CMS Takes A Look At Alzheimer’s With Lilly's Amyvid In Mind" - Pink Sheet, 16 Sep, 2012.)

As was the case with Provenge, that is a tougher position for the agency to be in—one where CMS has not yet picked a fight. Indeed, in the most recent example of a potential test to CMS’ routine coverage of FDA approved products, the agency decided not to act even after FDA withdrew approval of Avastin for metastatic breast cancer. (Also see "What Will CMS Do With Avastin In Breast Cancer?" - Pink Sheet, 1 Feb, 2012.)

Still, the Amyvid decision is a milestone: CMS is explicitly proposing, after lengthy and careful deliberation, not to cover the product for its FDA approved indication (or for any other use, outside of clinical trials). That is a milestone worth noting.

A Tough “Yes” For FDA…

It also bears noting that this was a very tough approval process for FDA as well: the regulatory agency (like CMS) struggled with exactly how to handle a diagnostic that seemed to do well in identifying patients who do not have Alzheimer’s, but functioned poorly in identifying those who do. The approval came only after intense debate by the agency’s advisory committee about the best way to assure appropriate training and interpretation of the test, and a “complete response” letter to generate clarifications on those points.

The approved label reflects that struggle. First, the indication statement is very detailed:

“Amyvid is a radioactive diagnostic agent for Positron Emission Tomography (PET) imaging of the brain to estimate β-amyloid neuritic plaque density in adult patients with cognitive impairment who are being evaluated for Alzheimer’s Disease (AD) and other causes of cognitive decline. A negative Amyvid scan indicates sparse to no neuritic plaques, and is inconsistent with a neuropathological diagnosis of AD at the time of image acquisition; a negative scan result reduces the likelihood that a patient’s cognitive impairment is due to AD.

A positive Amyvid scan indicates moderate to frequent amyloid neuritic plaques; neuropathological examination has shown this amount of amyloid neuritic plaque is present in patients with AD, but may also be present in patients with other types of neurologic conditions as well as older people with normal cognition. Amyvid is an adjunct to other diagnostic evaluations.”

And then there is a short but important “limitations of use” section:

“A positive Amyvid scan does not establish a diagnosis of AD or other cognitive disorder. Safety and effectiveness of Amyvid have not been established for: predicting development of dementia or other neurologic condition; monitoring responses to therapies.”

CMS’ proposed coverage decision notes the limitations and caveats in the FDA-approved labeling at several points.

CMS starts by noting that the pivotal trials to support approval of Amyvid were explicitly not of the type that the agency would consider “most informative” for using a diagnostic for early Alzheimer’s: a comparison between the test and AD diagnosed post-mortem, based on autopsy findings and a clinical history of deterioration in cognitive function.

“The apparent purpose of studies undertaken for the FDA,” CMS wrote, “was never to diagnose AD per se, but to assess the ability of florbetapir to identify amyloid plaque in the brain.”

In addition, CMS notes that FDA’s own advisory committee indicated important skepticism about the value of PET imaging as a comparator, rather than autopsy findings. “An initial plan to simply compare florbetapir to [Pittsburgh compound B] PET Aβ imaging was rejected (by the FDA advisory board) in favor of using autopsy findings as the appropriate reference standard – again not for diagnosis of AD, but for presence of amyloid in the brain.”

CMS goes on to stress that it agrees with FDA’s interpretation of the pivotal trial data. “We do not doubt that amyloid imaging is safe in humans and ‘efficacious’ for detecting amyloid burden in the end-of-life population in which it was tested (consistent with FDA findings),” the decision states.

…A Proposed “No” For CMS

The issue, CMS says, is not whether the scan can or cannot identify amyloid burden—it can. Rather, the question is whether the ability to do so has a clinical impact that would qualify as “reasonable and necessary” for Medicare beneficiaries.

CMS notes that only one study reviewed in the entire NCA process even sought to quantify the impact on Amyvid on clinical decision making, and that the study is best viewed as one MEDCAC member described it: “hypothesis generating.”

CMS says it is open to any number of potential measures of utility for an agent like Amyvid, including clear evidence that it minimizes exposure to ineffective/harmful therapies or even helps establish a firm foundation for palliative care.

However, the agency notes the dilemma of a “rule out” test in a general population. “Consider for the sake of illustration that – although this has never been demonstrated – the impact of the test in wider community practice (not just in the expert clinical trial setting) has an impressive 90% sensitivity and 90% specificity (using the postmortem gold standard as the reference),” CMS states. “What does this mean for a particular patient who gets the test?”

CMS notes the prevalence of AD is about 12.5% in the elderly population. “The above 90% values for sensitivity and specificity would generate a > 98% NPV (the chance the patient does not have the disease if the test is negative) but a PPV of only about 56% (the chance the patient has the disease if the test is positive),” CMS notes. “In this case, a negative scan virtually excludes AD, echoing the FDA-approved label that ‘a negative scan is inconsistent with the diagnosis of AD.’ But the meaning of a positive scan is unclear (also consistent with the FDA-approved label that a positive scan does not confirm the diagnosis of AD or other disease).”

The agency then runs through various arguments for how a negative scan could change clinical behavior to improve outcomes. In each case, CMS sees the logic as questionable – and the evidence as entirely lacking.

Moreover, “perhaps a greater challenge is that while a negative scan might be helpful or even just reassuring for many patients, if the scan happens to be positive for those very same patients, the meaning of this result is unclear.”

And, finally, CMS offers an interesting take on whether it would even consider a reliable “positive” scan valuable, in the absence of an appropriate therapeutic option to consider in the presence of a positive scan. In particular, CMS’ analysis suggests that it would not necessarily approve a scan based on the “value of knowing”—at least, not without some clinical data demonstrating that value in a tangible sense.

Coverage For Clinical Development

CMS is setting a very high bar for coverage of the diagnostic itself in the absence of a clear tie to a therapeutic. That in and of itself is an important policy position that has implications well beyond Alzheimer’s if in fact it is finalized.

Advocates are already lining up to seek to overturn CMS’ conclusion about whether the scan is in fact “reasonable and necessary” in the Medicare population, and it will be interesting to see whether CMS sticks to its guns when the policy is finalized in October. (Also see "Alzheimer’s Community Prepares To Challenge CMS Amyvid Proposal" - Pink Sheet, 16 Jul, 2013.)

Even if it is implemented, however, CMS is not shutting the door on coverage of the agent altogether. Instead, CMS is proposing coverage in the context of clinical trials to test those “hypotheses” about its impact on clinical decision making—and for use in enriching the patient population in clinical trials of potential therapeutics.

The agency says it is willing to pay for scans in the context of CMS-approved studies intended “to exclude Alzheimer’s disease (AD) in narrowly defined and clinically difficult differential diagnoses, such as AD versus frontotemporal dementia (FTD).”

That is a classic application of the agency’s coverage with evidence policy—and, in keeping with recent revisions to that policy, CMS is very explicit in defining the types of studies it would support.

The second area for CED, however, is more novel: “to enrich clinical trials seeking better treatments or prevention strategies for AD, by allowing for selection of patients on the basis of biological as well as clinical and epidemiological factors.”

That proposal is noteworthy for several reasons:

• As a marker of CMS’ plans to develop CED as coverage pathway going forward;
• As an indicator of how CMS could use coverage to help in the quest for effective Alzheimer’s therapies; and
• As a direct benefit to Lilly—albeit far short of the company’s hopes for outright coverage of the Amyvid test.

CMS has recently updated its CED policy with the goal of better defining the role of the coverage pathway, but also with the hopes of finding creative ways to use the Medicare coverage process to shape evidence development and ultimately innovation. (Also see "Coverage With Evidence Development and Expedited Approvals: Policy Proposals For FDA and CMS" - Pink Sheet, 21 Feb, 2012.)

In opting to use the pathway to support Amyvid testing, CMS is explicitly trying to encourage an approach to drug development that would (potentially) answer once and for all the question about beta-amyloid’s role in Alzheimer’s.

However the science evolves in this particular category, that marks the Amyvid policy as an interesting test of the ability of coverage policy to shape drug development.

Immediate Implications for Alzheimer’s Development

More immediately, the policy underscores the agency’s current thinking on Alzheimer’s therapeutic development. In fact, CMS officials have publicly highlighted the Amyvid coverage analysis as a good one for therapeutics developers to watch. (Also see "CMS Proposed National Coverage Decision Topic List Exempts Biopharma" - Pink Sheet, 17 Dec, 2012.)

In that context, the draft policy suggests that CMS finds some promise in using beta amyloid status to enrich trial populations, and that the effort is important enough to encourage via the coverage policy—even though any potential impact is a long way off.

CMS’ support for enrichment designs appears reasonably well aligned with FDA’s on the promise—and challenges—of developing new therapies to alter the course of Alzheimer’s as outlined in a draft guidance earlier this year. (Also see "A New Direction for Alzheimer’s R&D: FDA Outlines Early Disease Pathway" - Pink Sheet, 29 Apr, 2013.)

However, CMS clearly believes there is a long way to go before a meaningful diagnostic/therapeutic paradigm emerges in the Alzheimer’s space. In its decision memo, CMS notes that “establishing clinical utility on firm ground” will take time because the gold standard diagnosis for Alzheimer’s still relies on autopsy.

But, the agency adds, the timeframe to define the clinical utility of the test will “likely parallel” the time needed for the development of effective Alzheimer’s treatments. “In the meantime, it appears promising, as we discussed earlier, to use PET Aβ imaging for patient selection in order to enrich clinical trials seeking to develop better therapies.”

CMS goes on to describe the goals of therapeutic trials and the “potential power of a negative scan.” The scan could both help Medicare beneficiaries by directing them to treatments more likely to benefit them and by improving the quality and efficiency of the trials themselves. “Due to the immense burden AD poses to Medicare beneficiaries (without considering burdens to their families and the Medicare system itself – which go beyond the scope of this NCD), the importance of developing effective therapies for AD rivals the difficulty of doing so.”

In proposing CED to support those studies, CMS notes that many Medicare beneficiaries are potential candidates for Alzheimer’s related trials. However, the memo notes, “we temper our enthusiasm” because effective future therapies might only be effective if used prior to or early in the process of amyloid accumulation and therefore most patients that would benefit would be younger than 65. The agency acknowledges that this would create a healthier pool entering Medicare, but its scope is to focus on today’s Medicare population.

CMS notes that ongoing research initiatives (i.e. the Alzheimer’s Disease Neuroimaging Initiative) could provide the infrastructure for generating the necessary evidence. “It would be possible to embed within such infrastructure the studies needed to close evidence gaps identified in this PDM, at the MEDCAC meeting, and in the literature. Indeed, some are underway.” CMS also noted that surrogate markers could eventually be identified to render longitudinal follow up to autopsy unnecessary.

Still, the availability of coverage for the imaging procedure could reduce the costs of clinical trials for drug sponsors interested in beta amyloid agents.

EXPEDITION 3 May Test Coverage Policy

In fact, one of the first to take advantage of the policy could be Lilly itself.

On July 12, Lilly hosted a media and investor call to outline its planned study design for the EXPEDITION 3 trial of solanezumab in mild Alzheimer’s. The study will enroll 2,100 patients who have a diagnosis of mild Alzheimer’s disease—including a positive florbetapir scan or cerebrospinal fluid assessment suggesting the presence of amyloid pathology at screening.

Lilly Senior Medical Director Eric Siemers underscored that the Amyvid screening requirement is an “important enhancement” to the study design, compared to the first two (failed) EXPEDITION trials, intended to address the possibility that some of the mild Alzheimer’s patients enrolled in the first trials did not have amyloid pathology.

He also stressed that the use of pre-screening with florbetapir would decrease the number of potential subjects who are approved for the protocol. Siemers notes that the original EXPEDITION trials had about a 25% screening failure rate; the new trial is projected to have a failure rate in excess of 50%. That also suggests a longer enrollment period, which Lilly estimates running 22 months, and therefore a longer timeline before completion (with Lilly projecting the final patient visit at the end of 2016).

Lilly would not say whether it intends to seek coverage for Amyvid in the trial, though it would seem to qualify under the draft policy. “It’s important to note that the CED decision is still draft,” Lilly said. “Regardless, it is too early to speculate what could or should be part of a potential registry trial at this time.”

Lilly, however, stressed that the cost of the trial will not be exorbitant. “As somebody that oversees trials in many different therapeutic areas, it is not extraordinarily expensive compared to some of the other trials that we run in other areas, cardiovascular or inflammation,” said SVP-Bio-Medicines Product Development Anthony Ware said. The company noted that it did a funding deal on earlier trials for $325 million to fund about half the cost of four potential Phase III trials at the time. The trial “will not be as expensive as some have speculated,” VP-IR Phil Johnson added.

Assuming the full trial cost is on the order of $200 million, the impact of CMS’ coverage for Amyvid is relatively small. But it isn’t nothing: assuming Lilly needs to scan 4,200 patients to enroll 2,100 (a 50% screening failure rate), the company could receive about $7 million in reimbursements for the drug alone (at $1,600 per dose) – and potentially twice that much in PET scan cost recoveries.

That’s not the policy outcome Lilly wanted from CMS – but a 10% savings on a major pivotal trial is a small silver lining, if the company opts to take advantage of CMS’ offer to pay for Amyvid in hopes of finding an effective therapeutic.