Monday, April 17, 2017

Brief Blog: CMS Publishes CY2018 Inpatient Rulemaking; Six New Technologies Seek Add On Payments

CMS has released its Inpatient Proposed Rule for FY2018.

The typescript version is online here (1832 pp).
On April 28, the typeset Federal Register version will appear here.
The CMS press release is here.

Update: Final Rule appears in Federal Register, April 14, 2017, here.

New Technology in Brief Review

In addition to the annual rejuggling of some DRG codes, an area of recurring interest is the "new" New Technology applications - beginning on page 349 of the current public review version.  CMS received 9 applications, of which 3 were withdrawn before publication.   The remaining six new technologies for add-on payments are:

  1. ZINPLAVA (bezlotoxumab)
  2. Edwards INTUITY ELITE Valve and Liva Nova PERCEVAL Valve
  3. STELARA (ustekinumab)
  4. KTE-C19 / Axicabtagene ciloleucel
  5. VYXEOS (cytarabine/daunorubicin liposomes)
  6. GammaTile
Drugs must be costly enough to substantially exceed the inpatient DRG for the conditions where they will be used, the same standard as for devices.   The products must be "literally new" (meeting carefully defined dates and rules) as well as technologically new, and must have have clinically impactful new benefits, and it must also fail to be "substantially similar" to existing therapies.  

Qualifying new technologies earn hospitals a bonus to each DRG for which the product qualifies, for 2-3 years.

Brief summaries of each product below the break.

CMS generally quotes an applicant's data regarding financial impact without too much comment.   CMS then concentrates on whether the technology is both "new" and "substantial clinical impact," voicing variable levels of skepticism from product to product.

ZINPLAVA is for patients at high risk of C Diff recurrence and targets its toxins, not the living bacterium; it was FDA approved on 10/21/2016.   CMS believes its indication is new, but requests comment on whether it is a "substantial" novel clinical improvement.   

CMS notes that the ELITE and PERCEVAL valves are similar, but it would potentially extend the "newness" criteria to both of them.  That is, two individually new and impactful devices entering the market at one time do not cancel each other out just because they are mutually "substantially similar."  Had one been marketed a year earlier, it would probably block the other's chance to ever be a unique new technology.   Here, for both valves, CMS remarks (page 366) "we are concerned as to whether the mechanism of action...represents an improvement to an existing surgical technique."   Net-net, I believe CMS wanted to avoid having either one of these technologies pre-empt the other on the newness criterion.

STELARA is a therapy for Crohn's disease via one time IV induction therapy.  The drug itself was first approved for subcutaneous use in 2009, but is newly approved for IV use.  Characteristically, CMS questions if the new version has a "substantially different mechanism of action."  Regarding substantial improvement, a recent NEJM article is cited (Feagan, NEJM 375:1946, 2016)  CMS raised concerns about whether the improvement criterion was met.

KTE-C19 is for relapsed non-Hodgkin lymphoma, and is under priority review as a breakthrough drug currently (it must meet a summer deadline at FDA to be included in CMS's final decision).  With regard to new technology, CMS very briefly makes an unusually detailed observation, in raising a concern "whether the CAR technology used in KTE-C19 may [be similar to] bispecific T-cell engager [BiTE] technology."  If you have a viewpoint, CMS staff welcome your thoughts.  CMS was also concerned that no survival benefit has yet been published.

VYXEOS is a new AML therapy pending approval.  It is a breakthrough/orphan drug for which priority review has been requested.  CMS did not seem to question "newness" but questioned whether observed improvements were sufficiently statistically significant.  CMS also asks whether "overall improvement in survival from 5.95 months to 9.56 months may not represent a substantial clinical improvement." [italics added]

GAMMATILE "is a new vehicle for delivery of cesium-131 brachytherapy sources" in brain tumors.  FDA approval is pending.  It is different than external beam radiation and is designed to avoid radiation leakage outside the skull and into surrounding brain tissue.  CMS raised concerns if brachytherapy is sufficiently different in mechanism of action from external radiotherapy and whether predicate devices for cerebral brachytherapy may exist.  It has been studied in both high grade gliomas and meningiomas.  If I read the clinical study summary correctly, clinical data is based primarily on trends to improved local control in early studies.* Comparison appears to be to other cohorts with other therapies.


As a footnote, for GAMMATILE, the applicant argues for reduced re-operation, which will be cost saving.  New Tech payment rules require that the technology add to costs, but only considers one time DRG costs, so future savings are fortunately not counted against the applicant.

*  E.g. in the studies on outcomes after GAMMATILE, statistical median PFS has not been reached, although that could be true either if follow up is too short or the therapy's impact on local control is very, very good.