Biotechs Urge Guardrails as Biden Mulls Life-Saving Device Rule

Oct. 25, 2021, 9:36 AM

Biotech startups and trade groups are rallying behind the Biden administration’s bid to repeal a rule to speed up Medicare coverage of certain innovative medical devices, arguing that revisions must be made to ensure quick access to life-saving products.

The Medicare agency finalized the rule (RIN 0938-AT88) in the last days of the Trump administration to give beneficiaries faster access to devices designated as “breakthrough” by the Food and Drug Administration. The rule, slated to take effect Dec. 15 after being delayed multiple times by the Biden administration, would allow Medicare to start paying for such devices almost immediately after they get FDA clearance, instead of the typical nine- to 12-month turnaround time.

The rule was crafted to encourage device makers to develop more technologies to treat and test for debilitating diseases, such as implants and gene-based tests for cancer and heart disease. But industry stakeholders have drawn attention to the complexities of balancing faster access and ensuring that patients are getting the most effective treatment.

“It’s not that we want it to be stopped because we don’t want people to have access, but we want these guardrails to be in place,” Kathleen Holt, associate director of the nonprofit Center for Medicare Advocacy, said.

The Centers for Medicare & Medicaid Services, in its proposal to rescind the rule, says it’s “not in the best interest of Medicare beneficiaries” because it may “provide coverage without adequate evidence that the Breakthrough Device would be a reasonable and necessary treatment” for the patient.

Dozens of groups representing biotech companies weighed in and argue the rule doesn’t guarantee the needs of Medicare patients will be adequately accounted for as the devices go through clinical studies. They also say that the rule’s definition of what’s considered reasonable and necessary could unintentionally limit patient access.

Many groups called on the CMS to engage in more talks with industry and beneficiary advocates to determine the best path forward.

A CMS spokesperson told Bloomberg Law that the agency is still reviewing public comments, and a final decision on whether to move forward with rescinding the rule is forthcoming.

The agency said in a blog post last month that if it decides to move forward with the proposal to repeal, it will conduct additional rulemaking and engage in further consultations with industry members “on how the agency can create new coverage pathways or use existing ones to provide an appropriate balance of access to new technologies with necessary patient protections.”

Move to Repeal

The rule would allow four years of Medicare coverage to begin on the day of FDA market authorization or a manufacturer-chosen date within two years thereafter.

The Trump administration issued the rule “due to concerns that delays and uncertainty in Medicare coverage slowed innovation and impaired beneficiary access to important new technologies,” according to the proposal to repeal.

But the CMS under Biden expressed concerns that it could prevent Medicare from removing coverage for devices later deemed harmful and unsafe to beneficiaries. It also noted the FDA doesn’t require that Medicare recipients be included in clinical studies prior to market authorization.

Scott Whitaker, CEO of the Advanced Medical Technology Association, said in a statement that his group was “disappointed” that the CMS sought to repeal the rule and that it “remains critically important to have a predictable and transparent pathway that ensures these innovations get to patients in need.”

He urged the CMS to work with AdvaMed’s members to “achieve our mutually shared goal of timely access of new innovations in health care diagnosis and treatment to patients.”

Medicare Population

Many other groups voiced their support for a new expedited coverage pathway yet backed the CMS’s proposal to repeal. They argued the rule as it stands doesn’t provide assurance that Medicare recipients are adequately represented in clinical trials to determine whether a device is safe and effective.

Invitae, a clinical genetic testing corporation, said in its comment to the CMS that a new final rule should “ensure that study populations are sufficiently diverse to account for the characteristics of the Medicare population.” The company said that would help provide “adequate evidence that the breakthrough device would be a reasonable and necessary treatment” for beneficiaries.

The Association of American Medical Colleges echoed these concerns, noting that the Trump-era final rule “did not require manufacturers to conduct studies post-coverage that would demonstrate clinical benefit to Medicare patients.”

Holt told Bloomberg Law it’s essential to strike a balance between ensuring beneficiary safety and avoiding long wait periods for Medicare coverage.

“The concern that we had was, ‘OK, this is great for access,’ but like with any FDA approved item, you just want to make sure that you have done your due diligence to make sure that it is truly going to be safe and effective for patients,” she said.

‘Reasonable and Necessary’

Medicare coverage is limited to medical items and services that are reasonable and necessary for the diagnosis or treatment of a disease or injury, according to the CMS. The final rule marks one of the first official efforts to codify the definition of “reasonable and necessary.”

That provision has spurred concerns from industry groups that deciding coverage based on fixed requirements—rather than on a case-by-case basis—could limit the types of treatment beneficiaries can receive.

It could “get you to go down a road where you don’t necessarily think that this particular definition would apply in every case,” Holt said.

Under the rule, an item or service must meet three factors: it’s safe and effective, it isn’t experimental or investigatory, and it’s considered “appropriate for Medicare patients” in both duration and frequency.

How the rule defines “appropriate"—a treatment that “meets, but does not exceed, the patient’s medical need"—may not take into account how an individual’s condition may change over time, Holt said. She provided an example of someone with a progressive condition like ALS, also known as Lou Gehrig’s disease, being evaluated for a wheelchair.

“Maybe today you could use a manual wheelchair, but in six months you’re going to need to have an electric wheelchair, because you can’t use your hands to propel the wheelchair,” she said.

The Biotechnology Innovation Organization, a leading trade association for biotech groups, said the explicit reference to Medicare beneficiaries in the definition could “have the unintended consequence of inappropriately limiting access to novel devices and therapeutics.”

“The Medicare population is not homogenous and what existing clinical evidence may show to be ‘appropriate’ for a subset of patients for a given device or treatment may not be judged as ‘appropriate’ for the entirety of the vast array of all Medicare beneficiaries,” the group said.


AdvaMed since at least November 2020 has cautioned the CMS on the risks of codifying a “reasonable and necessary” definition, though a spokesperson for the group said the CMS should repeal that provision without canceling the entire rule.

Any repeal of the rule, however, should be followed by a period of negotiations with industry stakeholders, commenters said.

AdvaMed said improvements to the rule could include making the new coverage pathway a voluntary program. “An opt-in and early engagement process would ease CMS concerns regarding the number of devices that may seek coverage, as devices that are not Medicare-relevant or that pursue other existing coverage pathways would not be participants,” it said in a comment letter.

Holt said an expedited coverage program should include a CMS monitoring process and “guardrails” that ensure that services are safely and effectively meeting the needs of beneficiaries in the long term.

“It would be good to have a fast track, but it would also be good for there to be steps throughout the process that would create much more oversight than was proposed.”

To contact the reporter on this story: Celine Castronuovo at ccastronuovo@bloombergindustry.com

To contact the editors responsible for this story: Alexis Kramer at akramer@bloomberglaw.com; Karl Hardy at khardy@bloomberglaw.com

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