Want an Early Coverage Decision? Communicate with CMS.

Originally Published MDDI November 2003

FROM THE EDITORS

For the first time in its history, CMS is open to contact with industry at earlier stages of product development, and device firms should take advantage.

Medical device firms have become very thorough about keeping in contact with FDA during the product approval process. For the most part, however, they are not diligent about communicating with the Centers for Medicare & Medicaid Services (CMS; Baltimore) during the coverage-decision process. Perhaps it's time for that to change.
Much has been made of Johnson & Johnson's (New Brunswick, NJ) ability to obtain CMS coverage of its Cypher drug-eluting stent a year before FDA approval. While most device firms may not be able to go to the lengths that J&J did, that is no reason not to forge ahead with the coverage-decision process while the product-approval process is still ongoing.

CMS, in fact, is now encouraging such practices. At least that's what its administrator, Thomas A. Scully, told those in attendance at the Cleveland Clinic's Medical Innovation Summit, held in October 2003. Of course, with a better process comes higher expectations, and the agency expects any outreach by industry to be substantive.

“I am stunned at how many in the business community do not come to CMS,” Scully said. “Device companies would spend all this time with FDA and feel that all they had to do with us was show up for one presentation and say ‘write us a check'.” We don't do that anymore. We want you to come in and show us what your product is and what its value is, and we will try to make our decisions more quickly.” 
Similar encouragement is coming from FDA. At the Cleveland Clinic summit, FDA commissioner Mark B. McClellan, MD, PhD, said his agency is willing to share information it receives with CMS to expedite the coverage-decision process, but only if industry takes the initiative and asks it to.

“We handle confidential, commercial information, and there are restrictions on what we can share with the public, including some other government agencies,” he said. “In the [Cypher] case, the company made it clear that they did not mind if we shared information with CMS. So they were able to get [CMS coverage before FDA approval]. It took us all working together for the information to be shared appropriately. If any company wants to do this, we are happy to provide information [to CMS] and consult with them about what we have learned.”
Clearly, the government is demonstrating more willingness to have dialogues with industry. The flip side is that one reason for that is that FDA, CMS, and other agencies are looking for more and better evidence that a medical product is safe and effective. 

That means, Scully said, that any firm that reaches out to CMS must be prepared to tell the whole story, and not hide facts that it believes may work against it. “You are looking for a quick, fair decision. If you are fair and straightforward with us, then we will be with you,” he said. He noted, though, that being fair also means understanding that reimbursement levels, and therefore prices, should drop as production and sales volumes increase. 

The increasing focus on evidence-based medicine, however, raises a concern about whether CMS will expect firms to provide outcomes research for future coverage decisions. Outcomes research clearly benefited J&J, but it also carried a price tag that smaller companies might find too steep. Several venture capitalists at the Cleveland Clinic summit went so far as to suggest that evidence-based medicine and outcomes research could raise development costs too high for start-up companies to enter certain markets. And that would rob the device industry of much of its innovation, regardless of how well it communicated with the government.

Is such a nightmare scenario possible? It's too early to tell. But even if outcomes research isn't a viable strategy, early communication with CMS certainly is. It's one that device firms of all sizes should adopt.

The Editors

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