Medicare officials said Wednesday that the program will pay the $93,000 cost of prostate cancer drug Provenge, an innovative therapy that typically gives men suffering from an incurable stage of the disease an extra four months to live.
The Centers for Medicare and Medicaid said the biotech drug made by Dendreon Corp. is a "reasonable and necessary" medicine. The decision ensures that millions of men would be able to afford the drug through the government-backed health care coverage. With government reimbursement, analysts estimate Provenge could rack up $1 billion in sales next year. The decision, which will be finalized by June 30, is important for Dendreon because most prostate cancer patients are 65 or older.
Medicare is legally prohibited from considering price when deciding whether to pay for a new treatment. The Food and Drug Administration approved Provenge last April and in most cases Medicare automatically covers drugs cleared by the agency. But Medicare's decision to review Provenge last year prompted outrage from some patients and doctors who said the government was looking for a reason to avoid reimbursing for the pricey drug.
The infused drug is a first-of-a-kind treatment in that each dose is customized to work with a patient's immune system. Seattle-based Dendreon says Provenge's price reflects the more than $1 billion spent researching and developing the drug. And prostate cancer patients point out that the median survival time with Provenge is double that of chemotherapy, which is about two months and is marked by significant side effects.
"It's impossible to put a dollar figure on a human life, especially when you're talking about a drug that has such mild side effects," said Jim Kiefert, a prostate cancer patient and advocate who was part of the Provenge study. "Of all the treatments I've had _ with surgery, radiation and hormone treatment _ Provenge had fewer side effects than any of them."
But bioethicists who study health care decisions say Medicare's ruling on Provenge mirrors the bias of the overall U.S. health system, which emphasizes expensive treatments over basic medical care. Health care costs account for nearly one fifth of the U.S. economy, more than any other country.
"We tend to put our health care dollars into very high-tech interventions that produce very marginal improvements," said Dr. Steven Miles, a professor at the University of Minnesota's Center for Bioethics. "The problem is that we have created a health care system that is uniquely inadequate in terms of access to primary health care, which is where you get the most bang for your buck."
A growing number of biologically engineered cancer drugs are being priced in the $100,000 range, including therapies from Roche and Eli Lilly & Co. Last week, Bristol-Myers Squibb Co. received approval for a new melanoma drug that will be priced at roughly $120,000 per patient.
Provenge is the first FDA-approved cancer drug that uses the body's own immune system to fight the disease, offering an alternative to chemotherapy drugs that attack cancerous and healthy cells at the same time. The treatment is intended for men whose prostate cancer has spread elsewhere in the body and is not responding to hormone therapy or radiation.
Each regimen of Provenge must be tailored to the immune system of the patient using a time-consuming formulation process. Doctors collect special blood cells from each patient that help the immune system recognize cancer as a threat. The cells are mixed with a protein found on most prostate cancer cells and another substance to rev up the immune system, and then given back to the patient as three infusions two weeks apart.
Industry observers say much of the scrutiny of Provenge stems from the current political climate, as voters push lawmakers to cut the deficit and rein in government spending. At the same time, the new health care reform law has stoked debate about how much say the government should have in approving coverage of medical treatments. Republicans have accused the acting chief of Medicare, Dr. Donald Berwick, of advocating health care rationing, based on statements he made as a professor at Harvard University. President Obama appointed Berwick to the post last year, but Senate Republicans have opposed his confirmation and have urged Obama to nominate someone else.
Dr. Sean Tunis, a former Medicare official, called Wednesday's decision a case of "the dog that didn't bark."
"You could almost guess that this would be outcome before they even started. So why raise all the anxiety and subject yourself to all the criticism of rationing?" said Tunis, who is director of the Center for Medical Technology Policy in Baltimore.
Medicare officials have said the agency's review of Provenge was aimed at clearing up bureaucratic confusion among Medicare carriers across the country, some of whom already pay for Provenge. Medicare on Wednesday called its online memo a "proposed decision," but it essentially amounts to agreeing to cover the drug for millions of seniors enrolled in its program.
The news sent Dendreon shares up 66 cents to $36.20 in after-hours trading. The stock closed the regular session down 34 cents at $35.54 before the announcement.