Wall Street Journal Examines CMS’ Reversal on Medicare Coverage for Eye Medication

The Wall Street Journal on July 16 examines Medicare's "highly unusual turnaround" on coverage for an eye disease treatment called Visudyne, a case that provides an "unusually candid look at the Byzantine ritual of government approval and reimbursement of drugs and treatments." According to the Journal, "mistrust and miscommunications" between CMS; the FDA; QLT Inc., the Canadian biotechnology company that developed Visudyne; and QLT marketing partner Novartis AG contributed to Medicare's reversal on coverage of Visudyne -- which is administered in doctors offices -- for a certain form of age-related macular degeneration. Sean Tunis, acting chief clinical officer for Medicare, said, "What makes policy making so difficult is that the coverage decision is black and white, but the science is always gray." Some patient advocacy groups attributed the government's coverage reversal to Visudyne's cost -- $1,228 per treatment, as set by Novartis. Covering the drug would cost Medicare an estimated $200 million in the first year and more in subsequent years. But CMS Administrator Tom Scully said that cost was only "one secondary factor" in the agency's decision to reverse coverage of the treatment.

Background
In April 2000, the FDA approved Visudyne for patients with age-related macular degeneration who had easily detectable, or "classic," lesions on their eyes -- a condition that affect about 35,000 patients -- and Medicare in October 2000 agreed to cover the treatment for beneficiaries with such lesions. However, Medicare officials decided not to cover Visudyne treatment for beneficiaries with occult lesions, which are not easily detectable and affect about 75,000 patients. In 2001, QLT and Novartis published results of a new study that found "significant benefit" for patients with occult lesions after 24 months of Visudyne treatment. However, the study did not show a benefit for patients after 12 months of treatment, the original target period. The companies then sought FDA approval to market Visudyne as a treatment for people with occult lesions, but in April 2001 agency officials rejected the request and asked for additional research. In May 2001, QLT and Novartis met with CMS officials, seeking a change in Medicare coverage of Visudyne for patients with occult lesions, based on the results of the study. During that meeting, Medicare officials asked QLT and Novartis representatives about the FDA's position on using the treatment in patients with occult lesions. The drug company representatives told Medicare officials that the FDA likely would not approve the treatment for such patients without a second study. To reach a decision, Medicare consulted with a number of eye experts, but not with the FDA. The Journal reports that "Medicare insiders" said the program "fiercely guards its independence" from the FDA, and communication between CMS and FDA "has been sporadic over the years." In October 2001, Medicare decided to cover Visudyne for beneficiaries with occult lesions.

Reversal
However, after the FDA informed CMS officials about its decision to reject approval of Visudyne as for occult lesion patients, Medicare officials decided to reconsider their decision. The Journal reports that CMS officials "all but accused" QLT and Novartis of a "cover-up," saying they did not provide the agency with the information that Visudyne did not work in patients receiving treatment for 12 months. Company officials maintain they had told CMS of the 12-month trial results during the April meeting. After consulting with a number of experts and HHS physicians, CMS in March issued a new ruling reversing the coverage decision and highlighting the study's failure to meet the 12-month target. The ruling noted that it was not clear whether Visudyne would work in patients with occult lesions (McGinley, Wall Street Journal, 7/16).