This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Dendreon's Medicare Coverage Conundrum

Clearly, the market took this development as bad news, but please explain why.

Two words: Risk and delay. The odds seems small given Provenge's clinical data, but yes, CMS could decide not to cover Provenge at all, or CMS could decide to place severe restrictions on the product's use. Either of these scenarios would be disastrous for Dendreon.

Now, again, I don't think this will happen but the risk is there, which adds another overhang to Dendreon in the early stages of the Provenge launch.

Second, the NCD process for Provenge is going to take a year! CMS plans on holding a meeting before the end of 2010 to review Provenge's clinical data, which will be followed by a proposed NCD being issued in March 2011. After more public comment, a final NCD will be announced in June 2011.

In other words, the Medicare reimbursement overhang is going to be around for quite some time.

Will this effect Dendreon's ability to sell Provenge today, or stop insurance carriers from reimbursing for Provenge?

We don't know. Last night, Dendreon said the NCD process does not impact existing coverage decisions. That's correct. Private insurers can continue to reimburse for Provenge as can local Medicare carriers. Nothing about CMS spending the next year on an NCD for Provenge changes that.

However, some local Medicare carriers may decide to hold off or delay making coverage decisions about Provenge pending the final NCD. If that happens, Provenge sales could be adversely affected.

This is crazy! Provenge prolongs the lives of prostate cancer patients? How could the government say no to that?

You're right. The Food and Drug Administration approved Provenge for the treatment of advanced prostate cancer based on data demonstrating a 4.1-month survival benefit for the therapy compared to the control group. No cancer drug with a proven survival benefit has ever been denied insurance coverage before, and I find it hard to see how Provenge becomes the first.

Haven't some insurance carriers already decided to cover Provenge?

Yes, which is another factor in Dendreon's favor as it makes the case for Provenge in front of CMS. Recently, Aetna (AET - Get Report) and Humana (HUM - Get Report) -- private insurers -- have announced positive coverage decisions of Provenge. Perhaps more importantly, one of the country's largest local Medicare contractors announced its intention to cover Provenge.

Treatment with Provenge has also received a strong endorsement from the National Comprehensive Cancer Network.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AET $114.06 0.19%
DNDN $0.06 -6.02%
HUM $176.83 -0.44%
AAPL $95.18 1.64%
FB $117.44 -0.95%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs