Medicare's new CAR-T coverage rules could boost adoption of slow-growing meds

The national Medicare coverage rule for CAR-T cell treatments is finally here. By changing some requirements in the previous draft version, the federal government lifts some restrictions and burdens on healthcare providers—and could in turn boost adoption.

In a national coverage decision, Medicare will pay for CAR-T therapies, the Centers for Medicare and Medicaid Services said Wednesday. For Gilead Sciences and Novartis, which market FDA-approved CAR-T treatments Yescarta and Kymriah, respectively, the policy could help improve the drugs’ lackluster sales now that doctors will have the peace of mind that they can get reimbursement for these costly therapies.

RELATED: CMS: Medicare will begin to cover CAR T-cell therapies in some facilities

“Today’s decision makes it very clear that ‘Yes, this is covered.’ We’re paying that not only for CAR-T, but all the related services. The administration of the drug. The collection of the cells. The manipulation of the cells and then putting it back into the patient. And then any of their outpatient or inpatient care as well,” CMS Administrator Seema Verma said during a call with reporters.

The update could be “a key pivot point” for uptake in Medicare patients, Gilead’s new CEO Daniel O’Day said during a conference call last week ahead of the CMS announcement.

“We know that the use of Yescarta in Medicare patients also has an influence in centers on how they treat their non-Medicare patients,” he added. “Lots to continue to innovate here, not just on the science, but also on the reimbursement and access programs.”

Novartis, in a statement send to FiercePharma on Thursday, applauded the CMS' decision to allow nationwide Medicare coverage for CAR-T therapies, but also said it “continues to encourage CMS to develop reimbursement rates in the inpatient hospital setting that fully reflect the value of these innovative and groundbreaking products.”

RELATED: ASCO: Gilead touts CAR-T franchise with Yescarta analyses, early data on pipeline drug

The CMS said it will cover the therapy as long as it’s administered at certified healthcare facilities enrolled in an FDA-mandated safety program known as Risk Evaluation and Mitigation Strategies (REMS).

It marks a welcome development for the industry. In old draft rules, only when the treatment was performed in “hospitals” would it be covered, which meant oncologists’ own clinics might be excluded.

The final rules also remove a “Coverage with Evidence Development” (CED) requirement, which hospitals have lamented as being too cumbersome. The CED would have demanded hospitals to run patient outcome assessment at baseline, at treatment, and at several points of follow-up for up to two years post-treatment.

Now, the burden will fall on the FDA REMS program, which is developed and implemented by the drugmakers, namely Novartis and Gilead. The REMS programs are put in place due to the risks of toxicity linked to CAR-T therapies. Both Yescarta and Kymriah are required by the FDA to undergo 15-year postmarketing studies to monitor their long-term toxicities.

RELATED: Novartis’ slow-rolling Kymriah wins coverage in Japan at $305K: report

Medicare will also cover off-label uses of approved CAR-T drugs as long as they are recommended by CMS-approved compendia that are used to determine medically accepted uses of drugs, the agency said. Currently, Yescarta and Kymriah are both allowed to treat relapsed or refractory large B-cell lymphoma, and Kymriah is also approved for acute lymphoblastic leukemia.

The national Medicare decision came after the CMS on Friday finalized its policy to increase the maximum add-on payments for CAR-T drugs from 50% to 65%.

“The increased payment from 50% to 65% will promote patient access and reduce uncertainty that innovators face about Medicare payment for new medical technologies,” the agency said. In a statement, American Hospital Association EVP Tom Nickels called the increase a “much needed short-term relief,” but also called for new solutions to “address the long-term sustainability of providing these expensive therapies.”

Gilead has set Yescarta’s list price at $373,000, while Novartis has marked Kymriah at the list price of $475,000. Despite their high costs, sales have lagged far below the blockbuster threshold industry watchers had hoped for. Yescarta generated $216 million in the first half of this year, with the majority coming from the U.S. Kymriah hauled in $103 million in the same period.