Oct 27 2021. Auto transcript. Discussion of Prior Adminstration and MCIT Rule

 From webinar at USC on 10/27/2021 with Scott Gottlieb and Joe Grogan.

http://www.discoveriesinhealthpolicy.com/2021/10/very-brief-blog-joe-grogans-blog-on.html

AUTO TRANSCRIPT (Not corrected)

ERIN TRISH

 

Great, thank you. So I think, you know, you both have touched on the the kind of value of getting new therapies or new diagnostics or new treatments to patients quickly. And that's, you know, quite obvious during a pandemic, why we see such value there.

 

But, you know, switching gears a bit, I think there is a lot of value to getting new therapies or diagnostics to patients with unmet need, even beyond the pandemic setting.

 

So, Joe, you recently, you know, you did a nice job at the beginning of laying out the differences between reimbursement for devices and how that differs from the drug reimbursement or coverage pathways. But ultimately, you know, you recently wrote a blog post that described one of the rules that was moved forward under the Trump administration during your time there that was really pushing to accelerate coverage for innovative technologies for Medicare patients, on the exit rule that was moved forward and finalized during the Trump administration, but recently pulled back under the Biden administration out of raising some concerns. So can you describe kind of what were the goals? Or what were you trying to achieve with that policy? And what are some of the reasons why the Biden ministration is concerned with it today?

 

JOE GROGAN

Well, we were talking trying to do is get innovative technologies out to the marketplace as quickly as possible. So it's called the Medicare coverage and innovative, innovative technologies will and basically, it laid out that FDA designated device is breakthrough and then approves it, it would automatically be covered at on the CMS site, not every device, not every diagnostic, a small subset that was determined to be breakthrough would be covered. And that would short circuit, some of the bureaucratic hurdles that CMS erected to getting these out into the marketplace to the Medicare population, you would still have to figure out how much this product would get reimbursed for and go through. But that whole coverage, reasonable and necessary standard, which is different than safe and effective, and FDA would be dispensed with frequently, CMS raises objections about various devices and says they have to run their own trials and look at their own data and saying, Oh, this isn't suitable for the Medicare population, the population that FDA looked at was not representative Medicare. It's something certainly that device companies, diagnostic companies need to look at when they're designing their trials and figuring out hey, is this going to be suitable for CMS? Or am I going to have to do a whole new series of trials after FDA review? And, and so I think the reason why the Biden ministration didn't like this, and it was it was controversial. And Peter Bach wrote a wrote a big long hit piece about this, that this was going to be opening the floodgates to dangerous products, getting into the market and all this stuff, which I categorically disagree with. I mean, FDA, I have faith in the FDA, to approve it on the CMS side, I fail to see why you can't allow the marketplace to decide what is suitable or not once FDA decided to did safe and effective, and frankly, the Biden ministration wanted CMS to have more control over these products. We were more sympathetic to innovation in and of itself and letting the market decide. I'm hopeful that in the end, if the Biden ministration doesn't finalize some version of this that Congress will step in common it's it's a provision a similar provision is included included in the cures 2.0 bill which may go in the spring, and that I think would be great for patients but but we were a deregulatory administration. We were a deregulatory team and cutting out that level of review was important to us. The last thing I'd say about that too is the CMS staff who reviews these products at the various stages of coverage, coding and reimbursement frequently speaks of being understaffed and not having the technical expertise to review them. So this is another and finding people, frankly, who are technically sound to review complicated devices is a is a challenge at FDA to challenge and CMS, people like this don't don't grow on trees, and they're very in demand in private industry. So having unnecessary barriers because the bureaucracy can add qualified civil servants. We didn't think was a was a was was reason to keep the product from patients.

 

SCOTT GOTTLIEB

Yeah, the the genesis of this idea was actually FDA, and it came from the professional staff inside CDRH. And initial discussions were directly with SEEMA VERMA about this. She, she faced opposition initially inside CMS, not because I think they were philosophically opposed to it. But the CMS didn't like the idea that professional staff there didn't like the idea of giving up their discretion by tying their coverage decisions to a decision made by FDA. So that, you know, CMS would effectively be forced to cover something just because FDA gave it a breakthrough designation. And that would take their discretion away. No, no agency likes to lose discretion. So the way we tried to solve that was by giving CMS, you know, more of a seat at the table and in how the breakthrough designations were determined as well. And that that seemed to get us there. Sema was ultimately able to move this through her own agency, the elegance of it was that not only was it sort of a presumption of coverage, but that presumption of coverage was going to be worth a lot of money in terms of foam was no cost, you were going to be able to finance this innovation much more easily. So if you know a new device, new breakthrough device, got a breakthrough designation, and there was a presumption that it was going to be covered on the back end, if it was successful, that was going to make it much easier to raise venture capital and get it financed in the private markets. And so really, for no cost to the federal government, all of a sudden, they were going to create a lot of Fiat investment, just by virtue of conferring a status on something. And that's always kind of advantageous, you know, you don't have to spend any money, but you can help promote a lot more capital formation. That was the elegance of it. My My feeling is that the Biden administration's decision to pull it was just gratuitous politics. There were some Democratic interests against this, particularly among the payers, who thought it would force them to have to cover technologies that they otherwise would have been reluctant to cover, or being will exercise more discretion about covering and, you know, they were pushing on the administration. And I think this was just an example of a new administration coming in and unraveling a policy from the old administration. I don't I don't think that there was sort of, based on what I've not heard, any kind of like philosophical, really hard feelings about this. I think this is was the kind of thing that kind of gratuitous policymaking you sometimes see when administration's change over. So I agree with Joe, I think that this could be done legislatively, I don't think that there is a whole lot of opposition to it, you know, the bureaucracy could be solved for their angst, I think the the payers just really isn't going to be a big hit to the payers, the reality is, most of these, most of these breakthrough products are going to get covered anyway. I mean, a vast majority of them are going to get paid for just a question of how quickly they'll they'll be paid for. So you know, it's not, it's hard to envision, and there are some estimates on how much money this is going to cost. But there's always seemed to be inflated to me, because most of these technologies will, will, in fact, get covered because they are breakthrough, medical technologies that are transformative from a healthcare standpoint.