The Washington Post this week wrote again about the Centers for Medicare & Medicaid Services review of whether the federal government insurance program will reimburse patients who receive Provenge -- and if so under what circumstances and for how much. The national coverage review has been controversial since it was announced -- as patient advocacy groups for prostat cancer have repeatedly pointed out that Medicare is not supposed to take cost into consideration when determining coverage.
As a reminder, Provenge was approved for use in late stage prostate cancer patients by the FDA in April. Provenge costs $93,000 per patient treated and on average is expected to extend survival by 4 months. Therefore, Provenge has a QALY (quality of life for 1 year) of $272,000 - the 4th highest among cancer drugs. Drug companies and cancer experts are concerned that if Medicare makes an independent decision on which drugs will be used after FDA approval - it will effectively amount to a "second approval" that drug companies need to navigate. This may cause drug firms to shy away from the cancer area with new innovative therapies. Private insurers tend to follow Medicare's lead so the Medicare decision can have a huge impact on a drug's availability based on the reimbursement policy adopted.
The counter argument is that society can't pay for everything and that choices need to be made. The fear is that if we keep paying for high priced treatments with marginal clinical benefit (and we can debate what 4 months is worth to a dying man or woman), then we won't be able to afford health care. The debate rages on and the Provenge decision by Medicare needs to be closely watched.
Fierce Biotech reports today that Bavarian Nordic is close to announcing that it's found a "big pharma" partner to fund phase III clinical trials for its prostate cancer vaccine called Prostvac. Analysts have pegged Prostvac as a potential strong competitor with Dendreon's Provenge. The Bavarian Nordic drug more than doubled Provenge's survival rate in phase II trials (only phase II though), and also bettered survival with J&J's abiraterone by 3.9 months on average. Bavarian Nordic may be able to cash in with a royalty stream in excess of 25% with its partner. Bavarian Nordic has experienced a very tough revenue year so they could use the success.
Posted by Bruce Lehr November 9th 2010.