Skip to main content


The Problem of Limited-Supply Agreements for Medicare Price Negotiation

Recent posts

FDA Green Light Inches Genetic Screening Forward

The FDA recently granted authorization for the first multi-gene test for assessing hereditary cancer risk, marking a significant advancement in genetic screening capabilities. Developed by Invitae Corporation, the Invitae Common Hereditary Cancers Panel analyzes variants in 47 genes associated with increased cancer risk. Using next-generation sequencing on DNA from blood samples, the test looks at BRCA1 and BRCA2 variants linked to breast and ovarian cancer, as well as other cancer-related genes.  (image source: Adobe Stock Images) The FDA’s approval provides a regulatory framework giving labs a clearer roadmap for developing similar multi-gene panels. With an authorized model in place, labs can proceed more confidently in navigating FDA submissions. Specifically, the de novo classification created for Invitae’s test allows future lab-developed panels to gain regulatory clearance through the expedited 510(k) pathway by demonstrating substantial equivalence. This streamlined validation

TCET Pathway Could Accelerate Access to Innovating Technologies

The Centers for Medicare & Medicaid Services (CMS) proposed the Transitional Coverage for Emerging Technologies (TCET) pathway to enable quicker coverage decisions for breakthrough devices needing accelerated regulatory review. As described in JAMA Health Forum, TCET allows tailored oversight based on an innovation’s specific benefits and risks. TCET focuses on FDA Breakthrough-designated devices for serious conditions supported by limited clinical data for market authorization. By facilitating transitional coverage, TCET aims to help make cutting-edge technologies accessible to patients while additional real-world evidence is gathered to meet CMS’ “reasonable and necessary” standard.  For developers to optimize TCET’s streamlined approach they should be sure to: - Pursue FDA Breakthrough designation when criteria are met. This opens the TCET pathway.   - Engage CMS early on study designs and evidence needs. Incorporate draft guidance on endpoints and real-world data. - Enable rapi

The Future of Liquid Biopsies: Endless Possibilities for Cancer Testing

Liquid biopsies are poised to disrupt cancer testing as we know it. These novel blood tests analyze circulating tumor DNA (ctDNA) and other molecules released by cancer cells, providing a non-invasive option for detection, diagnosis, and monitoring. The promise of liquid biopsies has generated tremendous excitement, along with over $1 billion in investments and acquisitions in recent years. But how close are we to realizing their full potential?  A recent review article sounds a note of caution amidst the hype. While liquid biopsies show ability to detect cancer, evidence that they improve patient outcomes is still lacking. Randomized trials with survival endpoints are needed to prove clinical utility. However, this provides the perfect opportunity for innovative diagnostics companies. Rather than dampening enthusiasm, these evidence gaps highlight major growth possibilities if companies can demonstrate real-world value.   We envision liquid biopsies transforming oncology across three

Bridging the Gap: The Long Road from FDA Approval to Medicare Coverage

A new study published in JAMA Health Forum reveals that the road to Medicare coverage for novel medical technologies is a long and winding one. Researchers found that only 44% of innovative devices and diagnostics approved by the FDA from 2016-2019 had even “nominal” Medicare coverage by 2022. This data highlights major hurdles in the system that delay patient access to beneficial emerging technologies. About the Research The study examined 281 novel products cleared through the FDA from 2016-2019 via the high-risk premarket approval, de novo, and breakthrough 510(k) pathways. These included things like groundbreaking diagnostic tests, implantable devices, and other innovative treatment technologies. The goal was to measure how long it took to establish national or regional Medicare coverage policies for these newly approved products. This is important because Medicare coverage is required before hospitals, physicians and patients can reliably access new technologies. Key Findings The

Selecting Therapeutic Alternatives: A Critical Perspective for Drug Manufacturers

The Inflation Reduction Act (IRA) of 2022 instructed the Centers for Medicare and Medicaid Services (CMS) to initiate drug price negotiations with manufacturers for the first time. A key component of these negotiations involves considering factors like the drug's benefits and costs to establish a "lowest maximum fair price." (MFP) For drug manufacturers, CMS’s process for making comparisons of therapeutic alternative(s) to determine the MFP raises a number of crucial questions. The IRA's guidance suggests that CMS will initially compare drugs within the same class as the negotiated drug to determine a starting point for pricing. For drug manufacturers, this approach raises concerns regarding price competition within drug classes. As new drugs are often priced in line with preexisting brand-name drugs in the same class, the negotiation process may result in downward pressure on prices for all drugs in the class. This could significantly affect the revenue and profitabi

Price Negotiation Poses Challenges for CMS

I just finished reading Anna Kaltenboeck’s article in Health Affairs titled “CMS Threads the needle on a Tricky Question: What is a Drug?"  Kaltenboeck raises a number of potentially thorny issues that, if not addressed fully, could have negative implications on CMS’s drug price negotiation process. I was at CMS in the early 2000’s and was involved in maturing the Average Sales Price (ASP) program under Part B. We spent several years drafting, reviewing, re-drafting and proposing and re-re-drafting policies that were aimed at filling in the blanks in the ASP system. We took a thoughtful and meticulous approach to questions such as “How should a lagged discount be reflected in ASP?”, “What is a bona-fide service fee?”, and “How should ASP reflect ‘intentional overfill’?” Here are three things that I took away from Kaltenboeck’s article: 1. Rapid Implementation Brings Seen and Unforseen Challenges: The Inflation Reduction Act (IRA) requires the Centers for Medicare and Medicaid S