Further Development in Coverage with Evidence Development (CED)

On November 29, 2012, CMS released draft guidance updating the status of Coverage with Evidence Development or CED at the agency. Clearly, there continues to be an effort within CMS to justify and ease in the more regular use of CED in policy setting. The following will address a brief history of CED and important statements by CMS in its latest draft guidance.

CED, in CMS’s own words, is a mechanism “through which we provide conditional payment for items and services while generating clinical data to demonstrate their impact on health outcomes”. In theory, it is a reasonable attempt by Medicare to make a promising technology available earlier in its developmental process to patients in need while, at the same time, requiring the ongoing collection of data on the clinical outcomes associated with the technology’s use. It is clearly important for clinicians and patients that there be the continual analysis of data to strictly define the risks and benefits attending the use of any drug, device or procedure. It is also important that there be predictability, timeliness and certainty in the coverage process for patients, clinicians and for the innovator companies that have invested the monetary and intellectual capital to bring an innovation to patients who need it.

CED was formally introduced by private payers in the literature (McGivney, JNCI, May 20, 1992) as a concept twenty years ago. The impetus for the private payer postulate was the tremendous diffusion and utilization of a drug based procedure called high dose chemotherapy with bone marrow transplant (HDC/BMT). The use of this therapeutic strategy in the early 90s, with its serious toxicity and cost of at least $100,000, targeted patients with hematologic cancers and solid tumors such as breast cancer. Thus, it is important to note that the intended focus of the initial application of CED was to be on procedures for which no regulatory agency had responsibility, unlike the FDA with its oversight of drugs and devices. The initial CMS application of CED in 1996 was also on a procedure, lung volume reduction surgery. However, the resurgence in CED in 2005 and 2006 focused on devices and, also, drugs for colorectal cancers.

The most recent CMS pronouncement continues to highlight important issues to watch.

Firstly, the guidance is issued so that CED “can be used more widely and effectively as a driver for innovation”. While the term “driver” is encouraging, it is viewed skeptically by some who suggest that the phrase “manager of innovation” might be substituted more accurately. Notwithstanding the semantics, the quoted phrase is yet another signal that CED is indeed going to be applied more often at CMS.

Secondly, a basic argument and focus of CMS is that often drugs, biologics, devices and procedures are evaluated scientifically in studies where the study populations are not related or relevant to the Medicare beneficiary population. CMS posits the need for CED based upon a principal CED function of generating new evidence “on the benefit or harm of an item or service among the beneficiary population based upon rigorous scientific inquiry”. For drugs and biologics this could eventually mean that FDA approval does not guarantee complete coverage if CMS were to adjudge that the studies for FDA clearance were not conducted in a population close enough to the Medicare beneficiary population. Also, off-label use is a likely target for further evaluation through CED.  The “prospective” CED studies could take years given that CMS indicates that upon completion of the study the collected data must be communicated within 2 years. One only needs to do the math in terms of total time for study design, design approval, the accrual of patients, final accrual of the last patient, collection of the final data points, analysis, and publication.

An interesting twist is the verbiage spent on justifying the authorization for the AHRQ to conduct and support needed studies. Adding AHRQ more directly in the mix can serve only to extend a process in juxtaposition to an era of rapid advancement in science and technology in cancer care. Remembrances of the Office of Health Technology Assessment (OHTA) in the predecessor agencies, AHCPR and NCHCTR, and the attendant delays in reaching coverage policy determinations raise further concern.

While there are many other noteworthy points, it is important to highlight that CMS points out the “complementary roles of randomized controlled clinical trials (RCTs) and practical observational studies to close outstanding evidence gaps and allow coverage after an RCT ends where appropriate”. The era of observational data based upon sound methodology being accepted as a basis for important policy decisions is approaching.

The sixty day comment period ends on January 28, 2013.  Informal comments are accepted here.

By William T. McGivney, Ph.D., Principal, McGivney Global Advisors

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