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By Michael Fitzhugh

A Medicare advisory committee reviewing Dendreon’s (NASDAQ:DNDN) prostate cancer drug Provenge has voted to support government reimbursement of the drug’s use despite its steep price. The decision makes it likely that Medicare will cover the drug.

The treatment costs $93,000 and has been shown to extend for an average of four months the lives of patients with asymptomatic or minimally symptomatic metastatic castrate-resistant prostate cancer. Although the U.S. Food and Drug Administration approved Provenge in April, coverage of the drug by Medicare has been seen as crucial to its market success since prostate cancer primarily strikes men older than 60, many of whom rely on Medicare to pay for catastrophic coverage.

The Medicare Evidence Development & Coverage Advisory Committee reviewed both approved and off-label use of Provenge as part of national coverage analysis. The appraisal, conducted by outside medical experts on November 17, was initiated by the Centers for Medicare and Medicaid Services to evaluate Provenge’s risks and benefits.

The agency expects to issue a memo offering draft guidance on Provenge coverage by March 30, 2011 and expects to wrap up the national coverage analysis by June 30, 2011.

Medicare cannot take price into account when deciding whether or not to pay for a new treatment. However, many patients and some industry groups feared that the panel might serve as a referendum on the cost-effectiveness of Provenge in light a global trend in which governments are more closely scrutinizing public health expenditures.

Other comments filed with CMS expressed concern that the agency’s review would needlessly duplicate work already carried out by the FDA.

Allen Lichter, head of the American Society of Clinical Oncology, noted in July that if the review turned out to be an examination of whether to cover Provenge for its FDA-approved indications, it would be “both counter-productive and ill-advised.”

“We believe that CMS is required by the Social Security Act to cover drugs and biologics for FDA-approved indications used in anticancer chemotherapeutic regimens,” Lichter said in a letter to administrators at the Centers for Medicare & Medicaid Services.

Medicare officials have dismissed the notion that the review was driven by cost concerns, according to The New York Times. A Medicare spokesman said that the assessment will help to harmonize coverage policies among national Medicare carriers.

Source: Medicare Committee Supports Dendreon’s Provenge in Controversial Review