Medicare May Increase Payments for Expensive Cancer Drugs

scientist in lab, medicare to pay more for car-t therapy drugs

Last year, Medicare officials proposed increasing reimbursement rates for some expensive cancer drugs for patients whose bodies don’t respond to less expensive drugs. These drugs (known as CAR-T therapy) are extremely expensive, but Medicare only pays a portion of the cost, making doctors and hospitals less inclined to select it for cancer treatment. 

Medicare coverage for CAR-T therapy

Depending on which type of cancer these drugs are used to treat, the price tag can run anywhere between $373,000 to $475,000. Even more alarming, Medicare currently covers 50 percent of the drugs’ cost, but if a patient has complications or side effects from the drug, the price of treatment can easily double. 

Despite their effectiveness, the lack of reimbursement from Medicare makes doctors and hospitals less likely to select CAR-T therapy drugs because the providers are then left with hundreds of thousands of dollars to cover. 

Why are these drugs so expensive?

Part of the reason why these drugs are so expensive is the lack of competition. So far, the Food and Drug Administration (FDA) has only approved two versions of this type of cancer drug: Kymriah (Novartis) for childhood leukemia and Yescarta (Gilead Sciences) for lymphoma. 

Another contributing factor is how complex the drugs are because they use the patient’s own immune system to fight the cancer. The patient’s immune cells (T cells) are extracted, sent to a lab, and genetically modified to attack a specific protein that lies on the outside of cancer cells. Once these cells begin to multiply, they are infused back into the patient where they can begin to specifically target the cancer cells. 

Pleas from medical professionals

CMS began discussing reimbursement rates for these drugs when Dr. Efrem Castillo, Medicare & Retirement chief medical officer at UnitedHealthcare (UHC) wrote the agency a formal proposal. In the letter, he argued that not having higher reimbursement rates could create “significant financial risk” for CMS, Original Medicare, Medicare Advantage plans, and patients.  

Without increasing payments to hospitals, he writes in his letter, CAR-T therapy could create “significant financial risk” for the Centers for Medicare & Medicaid Services (CMS), Original Medicare, Medicare Advantage plans, and patients. 

Dr. Castillo was not alone in his plea to increase reimbursement rates. The American Society of Hematology (ASH); the American Society for Clinical Oncology (ASCO); and the Cancer Support Community (CSC), a patient-support group); also reached out to CMS. 

ASCO and CSC said in a letter: “We are concerned that Medicare beneficiaries will continue to face barriers accessing [CAR-T therapy] unless providers are reimbursed equitably for the treatment.”

CMS was expected to make a reimbursement determination in May, but the agency has since pushed back the deadline. 

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