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Time to Retire Medicare’s CED Policy?

Pressure continues to mount on the Centers for Medicare & Medicaid Services (CMS) to expand coverage for a new FDA-approved Alzheimer’s treatment, with members of Congress from both parties challenging the agency at a hearing last week. While the Department for Veterans Affairs has opted to cover the drug, CMS continues to drag its feet.

Writing in Health Affairs Forefront, Joe Grogan, Visiting Senior Fellow at USC Schaeffer Center, does a deep dive on the controversial policy CMS is using to restrict access—and forcefully makes the case that it should be retired:

During the George W. Bush Administration, CMS introduced a program known as “Coverage with Evidence Development” (CED) to drive innovation for medical devices by increasing access to new technologies through agency-approved clinical trials. In practice it has had much the opposite effect, creating barriers that prevent wider access to medical breakthroughs, limiting data for research, and ultimately hampering innovation.

Unfortunately, with the advent of a new class of Alzheimer’s treatments, CMS has now applied this policy to therapies when used on-label for the first time, effectively inserting itself as a “check” on the FDA. This decision is only the latest in a series of actions CMS has taken to hamstring innovation, which includes slow coverage for CAR-T cell therapy and continuous glucose monitors (to name only two examples) and the repeal of the Medicare Coverage of Innovative Technologies rule, which granted expedited Medicare coverage of FDA-designated breakthrough medical devices, along with continued delays on implementing its replacement. CMS should abandon CED or, at minimum, reform and restrict its use only for off-label applications of therapies.

Grogan covers a lot of ground with rich supporting evidence to support his argument, demonstrating how time and again the policy has failed patients and stifled innovation. We encourage you to read the article in full to understand the breadth of his position. Here are some of the key points:

  • Since 2005, twenty seven medical devices or procedures have been subjected to CED. However, only four had their evidence development programs retired and their national coverage retained. Multiple products that were amongst the first to receive CED continue to be required to generate clinical data today, almost 20 years later.
  • The policy is a never-ending coverage purgatory for innovators, with over thirty complex steps required simply to establish a program. The details behind each of these steps is extensive, and mistakes can be costly.
  • The resources required to facilitate CED can inhibit evidence development. It is not always clear who should bear what costs. This problem is more serious when multiple commercial actors market a technology; with development of evidence falling victim to a collective action problem where no actor has enough of a stake to assume responsibility.
  • CED chills innovation. Without a set timeframe, innovators may be unsure of what requirements must be met to “graduate” from CED and what events may trigger failure.
  • Applying CED to drugs, as CMS is doing for the first time with Alzheimer’s treatments, is inappropriate. The fact that drugs must withstand the scrutiny associated with a complete FDA approval process means that by the time drugs are approved by FDA, safety concerns have already largely been answered, and second guessing by CMS is unproductive.
  • CMS may attempt to employ CED for more high-cost therapies in a number of fields including oncology, Alzheimer’s, and other cell and gene therapies. Specific to cell and gene therapies, literature questioning the long term impacts of these therapies may encourage CMS to place them under CED, despite FDA licensing the therapies as safe and effective. However, even in these circumstances, CED is the wrong remedy.
  • If CMS has concerns about the medical necessity of an item or service, it may be able to employ real-world evidence on an individual basis to understand medical necessity. But it should not attempt to step into the FDA’s shoes by requiring a cumbersome data collection process simply to justify coverage owing to safety concerns on an FDA-approved product.
  • It’s extremely unusual for CMS to restrict coverage for an FDA approved drug when used in accordance with the label, as it has with its 2022 coverage decision for a new class of monoclonal antibody treatments for Alzheimer’s disease, and there is strong bipartisan support for reversing this decision.
  • CMS should scrap CED altogether, choosing instead to default to coverage of on label use for FDA approved drugs. Where CMS is unsure of the medical necessity of an item or service, it should defer coverage to its regional administrative contractors to make claim-by-claim determinations concerning medical necessity.
  • At minimum, CMS should refrain from placing drugs which receive FDA approval under CED, as it has threatened to do with lecanemab, due to the intense resource requirements and duplication of FDA’s already strict evidence requirements. CED should not be a tool to second guess the FDA or to cast aspersions on a legitimate approval pathway, like accelerated approval, which was designed to expedite patient access to treatments for serious medical conditions. The status quo with CED is not acceptable, and the agency should immediately rectify these failings.

Grogan served as domestic policy adviser to President Trump, 2019-20 and consults for the pharmaceutical industry, including manufacturers investigating Alzheimer’s treatments. You can read the full article in Health Affairs Forefront here.