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David Farber Weighs in on CMS’ Recent National Coverage Determination Proposal

Published January 28, 2022

Show Notes

On January 11th, the Centers for Medicare & Medicaid Services released an NCD proposal that would require “coverage with evidence development” for monoclonal antibody therapies aimed at amyloid for the treatment of Alzheimer’s disease. CMS’ coverage determination is deeply troubling, as it restricts Medicare recipient access to critical treatment.

Here today to discuss CMS’ national coverage determination and its implications on patients who suffer from Alzheimer’s Disease and other dementias is David Farber, an expert on international reference pricing, healthcare reimbursement, and the regulatory approval process for drugs and medical devices.

Episode Transcript

Michael Ward:

Hello, and welcome to This is Growing Old, a podcast from the Alliance for Aging Research. My name is Michael Ward and I am the vice president of public policy and government relations at the Alliance. During today’s podcast, we are going to talk about a recent proposal from Medicare addressing coverage for FDA approved treatments for Alzheimer’s disease. David Farber, a partner at the law firm of King & Spalding is joining us to discuss the implications of this proposal. David is a recognized expert on healthcare reimbursement and the regulatory approval and coverage processes for drugs and medical devices. David, thank you for joining us today.

David Farber:

Thanks again for having me and for having me back.

Michael Ward:

Oh our pleasure. So before we jump in, I think it’s important to provide some context around this coverage proposal for monoclonal antibodies for the treatment of Alzheimer’s disease and why it’s so controversial. The search for a cure for Alzheimer’s disease has been one of the biggest medical challenges over the last half decade. And over six million people currently have Alzheimer’s disease.

Michael Ward:

The disease is terminal and there is currently no cure. Despite investment in finding potential cures there had not been any new drugs approved for the treatment of Alzheimer’s disease in nearly 20 years until June of 2021. Many drugs were tested in clinical trials during that time, but they all fell short of showing clinical benefit. Last June, the Food and Drug Administration approved the first drug that illustrated likely benefit to help slow the progression of Alzheimer’s disease.

Michael Ward:

The approval of this drug aducanumab was controversial due to a disagreement between the FDA’s external advisory panel and FDA staff on the drugs approval, which has occurred in a number of other drug reviews as well. Additionally, the original list price for the drug waste concerns over the cost to the Medicare program. Since then the drug maker has had the list price of the drug. And CMS recently came out with the draft, national coverage decision on January 11th.

Michael Ward:

The proposed coverage decision states that Medicare will only pay for aducanumab as well as other medications that operate similarly, if the patient is enrolled in a randomized clinical trial. David, I went through that Medicare coverage decisions are very technical and I’m not sure that I helped to make it less technical. So at a foundational level for people with Alzheimer’s disease and their caregivers, what does this decision mean?

David Farber:

Sure. So let me just add one preface statement that the views I’m going to talk about today are personal to me, they’re not my law firms, not our clients, not the alliances. So just to get that out of the way. To your question, when an item or service for our purposes today, a drug or it could be a device as well, but today drugs comes onto the market, Medicare by law is only allowed to cover that drug if it is reasonable and necessary.

David Farber:

Those are the words in the law, reasonable and necessary. The phrase reasonable and necessary does not have a clear definition today. CMS has a manual definition of that phrase. And we can talk about that in a little bit more detail. But for drugs, it effectively means approved by the FDA and being used according to medical practice to shorthand it, and for other are procedures and devices, there are other definitions.

David Farber:

CMS did go through a final rule making in 2021… Or excuse me, yeah, it finalized in 2021, early 2021, where it put that definition into regulation that rule making and the regulation were since rescinded by the Biden administration. Some we’re back to the manual definition. But to cut to the chase, the key phrase is by law is the drug in this case, reasonable and necessary.

David Farber:

And that’s the process that CMS is addressing now. One other point if I may about process, there are a bunch of different ways that Medicare makes this determination. It can make the determination out of CMS headquarters in Baltimore, that’s called a national coverage determination, or an NCD as we may refer to it later, or it can defer to its regional contractors, or dozen or so regional contractors who actually process Medicare claims for Medicare around the country.

David Farber:

And those contractors each have a region and they can make their own decisions regionally. Those are called local coverage determinations, or the third way that this can be addressed is just on a claim by claim basis. In other words, there’s not an NCD, a national coverage determination, there are no local coverage determinations that apply in those particular regions and the contractors call the max.

David Farber:

We’ll just decide this, when they see the claim. Is this claim reasonable, or treatment, or item or service reasonable and necessary for this patient under this condition? Here, we are dealing with an NCD, a national coverage determination that would control the entire country rather than… And would overrule any local coverage determinations. That’s are dealing with here. One more nuance if I may, sorry for the long answer, there are different flavors of NCDs.

David Farber:

There is national coverage determination to cover something, that’s a coverage, a pro coverage determination. There are NCDs that reject coverage and deny coverage nationally. And there’s a lot of NCDs out there that refuse Medicare coverage for variety of different treatments, or items, or services. Then there is a third flavor. That’s the one that we are particularly dealing with here in the CMS proposal of two weeks ago, called an NCD with coverage, with evidence development, called a CED.

David Farber:

Where a Medicare says, “We are not going to cover the item or service, except if that item or service is done in a specific clinical trial, blessed by us at CMS, for the duration of the trial.” And only the Medicare beneficiaries who are able to get into that clinical trial or trials will have coverage, everybody else won’t.

David Farber:

So it’s effectively a no coverage with a little exception for anybody who participates in a very specific and designated clinical trial. That’s a CE, that’s the coverage with evidence development process or CED process. And that’s what CMS has proposed for what I will call the mAbs, the monoclonal antibodies that we are talking about today for all timers.

Michael Ward:

Okay. So in short, CMS is restricting coverage to not only this first drug, but other drugs that operate similarly? And so if you’re on Medicare, you are not able to access these drugs unless you enroll in a CMS approved clinical trial.

David Farber:

Well put. And you touched on something very important there, CMS makes these decisions, not on a product by product basis, but on a class basis. And that’s one of the highly controversial and to me really troubling aspects of the CMS announcement of January 10th, I think it was. They are making a determination for this entire class of mAb drugs, monoclonal antibodies for Alzheimer’s drugs.

David Farber:

Even though there’s only been one approved, and there are a whole bunch of clinical trials and multiple other manufacturers with different molecules who are going to be bringing their products through to the FDA. In other words, CMS hasn’t even seen the evidence or nor have we, on these other products yet CMS is making this class wide determination for all the products on the basis of what I believe is inadequate information on one of the products.

Michael Ward:

So this, I teed up a little bit of it in the intro that there, this has kind of been a controversial decision. There’s been passionate voices on both sides, disgusting their personal opinions on the FDA’s approval of aducanumab, which is the first drug in the class that was approved by the FDA. So I’m wondered if you could just take a minute to help us decouple. And I think you started mentioning it in your last passage, but could you help us decouple the context and the implications of the draft decision which if finalized would require this clinical trial versus the controversy that we’ve heard in the media?

David Farber:

Sure. The media controversy leading up to and following the approval, I think has really been focused on two issues, which really should not factor into the CMS coverage decision. Issue number one is price. When Biogen launched aducanumab, the brand name is Aduhelm, they priced a year’s worth of treatment, I believe north of $50,000 per year. I think it was 56 or 58,000. I’m now blanking on the number.

David Farber:

That price was controversial. A lot of human cry about how both patients and payers, including the Medicare program would be able to “afford the drug.” There are a lot of answers to that question. I’m not going to get into any of them here, but the price was highly controversial. And that surely didn’t help set off a huge media frenzy, and lots of critique and comment about the price.

David Farber:

By the way, Biogen at the end of 2021 announced that it was cutting the price in half. So the price right now will, it’ll still be north of $25,000 a year, but it’ll at least half of what it previously was. And HHS did its part to fuel that controversy by blaming the cost of the drug on a significant proposed increase in the part B premium for 2022, that was unprecedented. And frankly not quite believable to me, but be that as it may, a lot of controversy around price.

David Farber:

The second was the way that that Biogen had brought the product to the FDA, conducting two clinical trials, stopping those trials, taking a look back at some of the clinical trial evidence and on the basis of the evidence that had already been generated in these trials that had been stopped, then putting together its submission to the FDA and getting the approval that way. At the FDA, things were controversial. FDA convened an advisory committee that nearly unanimously recommended against approval.

David Farber:

FDA itself, the staff ignored the advisory panel and approved the product back in June, but that in and of itself was highly controversial. Biogen, I think would be the first to say there are side effects for some patients who will be taking aducanumab, that’s clearly disclosed in the label as it would have to be. And with the combination of the unusual approval pathway with Biogen halting the trials, and then submitting anyhow combined with the price and gave those who were not supportive of the product more than enough ammunition to fire away.

David Farber:

And although CMS openly says it neither, it did not consider any of that, many of us believe that that had to be a factor in driving CMS to the coverage with evidence development proposal that’s before us today.

Michael Ward:

I think one of the pieces that really struck me about the draft decision was that we talked about it a little bit, but that patients will be participating in a randomized clinical trial to obtain… In order to be eligible for coverage for Medicare. However, patients in Medicare part B are required to pay a 20% co-insurance on their drugs. So in effect for, due to this type of trial, typically requiring a placebo arm, which means they receive a sugar pill or something analogous that isn’t the treatment to make sure that the actual drug has an impact versus receiving nothing.

Michael Ward:

It could mean that there are patients out there that are on the hook for those financial costs potentially. So that’s an interesting concern and in, around the ethics of that consideration. I just wanted to ask from your perspective, David, I know you’ve gone deep into this decision, what’s your read on that particular case? And are there other potential financial liabilities for patients that may not be covered by this decision if patients do receive the drug?

David Farber:

Yeah. No, it’s an excellent question. And frankly, it’s another troubling aspect of the proposal. It’s not entirely clear that CMS has thought all these pieces through before putting out the proposal, although I’d be surprised if they hadn’t. But you’re correct, A, the clinical trial required by the draft CED is a randomized controlled trial that implies, it’s almost definitional. There has to be a placebo arm.

David Farber:

And those placebo arm patients are not getting any treatment. So why are they paying the 20% copay, which is standard for Medicare part B? They shouldn’t be paying a copay, but you can’t have and not pay a copay because then it wouldn’t be a blinded trial. And there wouldn’t be a true placebo group. It’s a real conundrum. CMS and a follow up conversation on January, I believe it was 12th, the 13th, they did an open stakeholder call and they said, “Oh, wait a minute.

David Farber:

Don’t assume that we meant placebo trial. Well, RCT, by definition includes a placebo arm.” So I think there’s a very big question about how the implementation of the CMS proposal plays out around this co-payment and co-insurance issue. There’s another point that you touched on. And I want to just bring out in more clear detail, which is what are the medical ethics about handing out a placebo when treatment is available and FDA approved simply as a predicate to allow people to get coverage?

David Farber:

In other words, we’ll give you coverage for something that most Medicare beneficiaries would not be able to afford out of pocket, but the price for that is you run a 50% chance that you may be getting a placebo rather than actual treatment. What are the ethics around that? And I think that there’s not been enough focus on that issue yet. I’m waiting for some of the medical ethicists to start commenting on that. But to my view, it is ethically in questionable to condition coverage by the U.S government and by the Medicare program on whether you’re willing to take that role of the dice and possibly get the placebo.

David Farber:

That’s not how the Medicare program should be working. So both from a medical ethics perspective, as well as just the legal aspects of requiring copays for non-treatment to other flaws that I see that will need to be addressed before CMS finalizes this proposal.

Michael Ward:

And I think that one of the, another aspect of this proposed decision that I think has been lost largely again in the media narrative, but also frankly in discussions that I’ve had on Capitol Hill is, there’s the assumption that this decision just applies to aducanumab, where it applies to entire class. So I guess, could you share a little bit more about, there that this would impact other drugs. So can you just share a little bit more about the timeline for those drugs that we’re expecting may be considered for FDA approval and the types of impacts that this decision would have on those as well?

David Farber:

Yeah. And so taking the questions in reverse order, it’s very difficult to predict the impact that this CED, if it were finalized would have on those other products that are in the process of going through phase three clinical trials and will be coming to market. Because why would a manufacturer invest all this money to bring their product through the FDA to approval only to face a preexisting CED that restricts coverage for their product to maybe 10,000 Medicare beneficiaries? And in a clinical or a therapeutic area where 80% of the patients are Medicare beneficiaries.

David Farber:

And so why go through spending the hundreds of millions, if not billions of dollars, just to be able to treat 10,000 patients for the next five years. Every incentive that exists in our healthcare system for manufacturers to bring products to market and to invest and take the risk, financial and otherwise of going through the process is just shreded by this CED.

David Farber:

There’s serious question as to what the long term impacts are? You’re exactly right. There are at least three other manufacturers who are right now working on phase three clinical trials, [inaudible 00:19:03], Lilly, and Roche, and those products were expected to… Those clinical trials were expected to read out 2022, 2023, this year, or next year, we were hoping to see a second and a third drug in the class over the next two, three years.

David Farber:

But based upon the CED, if it’s finalized, it’s not entirely clear what happens, who loses? Patients. So not only will Medicare beneficiaries not be able to access drug at all, unless you’re one of the lucky 10,000, and we can talk about who those people are and where they’re located. But if you’re a minority, you’re going to have a tough time here. If you’re living in rural America, you’re going to have a tough time here. So hundreds of thousands it’s going to be over millions of Medicare beneficiaries are going to be denied access if this CED is finalized, not only to aducanumab the approved drug, but potentially to, not potentially, but actually to all the other drugs that may come to the market in the future.

Michael Ward:

Yeah. I think that’s one of the interesting pieces because I know that there’s, like I said, there’s controversy about the initial drug, but there are other drugs that could have different profiles, both in terms of their performance, safety advocacy, that could create a different decision point for CMS and for patients. So I think that’s a very important note. And in your first, as we talked back to our first question, David, you talked a little bit about CMSs standard for determining whether they’re going to cover a drug or not.

Michael Ward:

However I’m coming back to discussion around the FDA approval. Medicare typically covers drugs once they’ve been approved by the FDA, because the FDA has gone through this rigorous process to determine if drugs are the standard that FDA uses, which is called safe and effective. So is it safe for patients to take it? And does it have a demonstrated efficacy in comparison to no treatment?

Michael Ward:

And so in this decision, CMS is really seems like they’re double guessing the FDA’s decision. And so I think I have concerns. I know the Alliance has concerns about the implications that this has for how Medicare could approach coverage, not only for this class of drug, but for other drugs moving forward. So I appreciate your thoughts on that.

David Farber:

Sure. No. I think your spot on there on several levels. First, the FDA has teams of scientists who delve into these issues and who scrub the data and are really able to unpack every aspect of the proposed product to be able to make that safe and effective determination. And another way to shorthand what the FDA decides is, are the risks outweighed by the benefits?

David Farber:

I mentioned that there’s a side effect to aducanumab. There will likely be side effects to the other products as well. Almost every drug that’s approved by the FDA has some side effects and the FDA looks very hard at those. And CMS has said, although they’re looking at a reasonable necessary standard, what they’re really looking at, and this is explicit in the CED is, do the risks outweigh the benefit?

David Farber:

Well, the FDA has spoken on that issue, with all due respect to the excellent medical doctors inside of CMS, there are far fewer technical experts inside of CMS than there are in FDA. These judgments are reserved to FDA. And now you have this clash of two agencies within the same department of HHS. One saying, risks outweighs the benefits. The other one saying, we need to study, do the risks outweigh the benefits?

David Farber:

Well, the decision has already been made. CMS should defer to FDA on this every time. And in fact, over history that’s exactly what has happened. This is the first time that CMS has ever called an FDA approved drug that’s being used, presumably being used on label into question in the context of a national coverage determination or a C E D. And that is troubling precedent overall, but it’s particularly troubling precedent in the context of the fact that we’re talking about Alzheimer’s patients here who have not had a new treatment in over 20 years.

Michael Ward:

So I want to touch, just make sure that we touch upon an issue that you brought up. And that was raised since, by CMS in the draft decision. CMS cited that they wanted a more representative sample of patients for this data, specifically citing very low rates of representation, of black, Hispanic, and other communities of color and the clinical trial for aducanumab. I think that we can all agree that that representation in clinical trials has been and an ongoing issue not only in for Alzheimer’s disease, but for other conditions.

Michael Ward:

And so I think, but it’s… So this is not a unique challenge. I just wanted to ask, what are the implications in terms of the draft decision on? Are they actually going to be able to recruit communities of color that actively represent the Medicare population that… Or is that going to be a challenge that ultimately makes, that’s a white whale in terms of actually being able to recruit a population that is truly representative?

David Farber:

Yeah. Again, key question and I think you’ve set it up exactly right. Everybody applauds the FDA, excuse me, CMS for its focus on health equity, and for making sure that minorities and the CED doesn’t talk about the rural population, but it’s also equally important that minorities, and I will say rural Americans have access to these treatments. But this is the wrong place to make that stand. And I think CMS knows that, A CED trials that have been conducted over the last decade or so, and there have been a number of them, have consistently failed to hit those representation targets.

David Farber:

And they’ve been built into every single one of them. And CMS knows it, AAR, the Alliance has done great work in calling this out to CMS over and over again. And in other contexts TAVR, the TAVR CED and others, and CMS knows that while the aspiration is absolutely laudable this is the absolute wrong way to go about it.

David Farber:

Secondly, it reminds me of the old National Lampoon magazine, “Buy this magazine or we shoot the dog.” I mean, that’s effectively what’s going on here. CMS is saying, “Okay, although clinical trials for the last 50 years have consistently failed to hit representation in health equity targets, we are going to deny Medicare beneficiaries all access to any Alzheimer’s treatment mAbs, unless this next clinical trial gets it.

David Farber:

It’s just in my view, wildly inappropriate. Should we be doing everything we can to achieve health equity? Yes. Should we be rolling out access to Alzheimer’s medications, aducanumab and others, so that we target those populations who need this drug the most. And particularly a minority community, which has a higher prevalence of Alzheimer’s and is wildly underserved? Yes.

David Farber:

Should we be doing it by prohibiting coverage nationally, including to minorities who uniquely have difficulties reaching these clinical trials, until this trial hits those metrics? No. Again, CMS can put the words on paper, we applaud them for the focus, but this is the absolute wrong way to go about it.

Michael Ward:

As we’re wrapping this up, I just wanted to ask, if from a patient and caregiver perspective, what would you highlight as the most important takeaways and how do you recommend they engage and make their voice known in this process?

David Farber:

Yeah, it’s a great question. And it’s a very timely question. I’ve referenced throughout the podcast, right now, and for the next 15 days, this is a proposed CED. So the process is CMS comes up with the concept, puts it out there in draft and solicits comments. It is critically important for anybody listening to this podcast, for patients across the country who care about access, for practitioners who want, would be interested in prescribing the medication based upon their own medical judgment and their own review of the clinical literature that people comment there’s a CMS website.

David Farber:

You can submit your comments, you can type them in, and make the points that you believe are important. Pick up some of the points that we’ve discussed today and share your opinions. But commenting is everything right now. The comment period closes February 10th, 2022. That is again, only 15 days away from now, or 14 days away. But CMS will pay attention to the comments and is looking to see the reaction. CMS has changed its proposed CED policy in the past in response to comments.

David Farber:

It proposed CED around CAR T therapies, and several of the same controversies that we’ve talked about today existed in that context. CMS got the comments from the public, withdrew the CED, and agreed to national coverage. And we hope that, or at least I hope that CMS will do the same thing here, but they won’t do it unless you comment. Everybody needs to submit of comments to CMS on their website, making these points.

Michael Ward:

Yeah. I think, I agree that’s really important. And I will say that just from my own experience, looking for them on CMSs website, that it can be a little challenging to get linked directly to where patients can provide comments. So if folks want to, they can visit agingresearch.org/campaign/adtaskforce. Or you can just go to agingresearch.org and enter Alzheimer’s disease task force in the search bar. And it’ll connect to a page that includes a link to the CMS site where you can submit comments by February 10th. I encourage everyone to do that.

Michael Ward:

Speed round, last question, David, can you share maybe one or two changes in healthcare policy that you hope will move forward this year?

David Farber:

I think that what we’ve just been talking about in this proposed CED is massive, not only for the Alzheimer’s community, but because of the precedent it sets. And I think that the issue that we’ve just been discussing is in my top five healthcare changes for the coming year. On the reimbursement side, there’s a whole bunch of great legislative ideas out there. The NOVEL Act introduced by Senator Burr, something I’d love to see enacted in the coming Congress.

David Farber:

There are rumors that we’re going to see the whole drug pricing debate come back and build back better. There’s some pieces of that that are good, like the Part D redesign some that are less good, like inflation rebates. And that will ultimately I think work in very different ways than Congress is expecting.

David Farber:

I hope some of that gets cleaned up as well, but there’s a lot coming our way in a very, very complicated election year. We’ll see. On the other side what this year actually brought to us. One thing we know is that this Alzheimer’s CED is going to get done this year one way or the other, let’s hope CMS does the right thing.

Michael Ward:

All right, David. Well, thank you again for joining us and thank you to the audience for joining us for today’s episode. We encourage you to follow the Alliance on Facebook, Twitter, and Instagram. You can also visit www.agingresearch.org to learn more about age related conditions, diseases, and issues that impact the health of older Americans. Please subscribe now and rate us on Apple podcast, Google podcast, Spotify, or anywhere else you listen. Thank you for joining. And we will see you next time on This is Growing Old.