“Spinal Disk Closer to Losing Medicare Aid”


Spinal Disk Closer to Losing Medicare Aid
By BARNABY J. FEDER (NYT) 602 words
Published: March 18, 2006

The clock is running out on Johnson & Johnson’s efforts to stop the federal government from barring Medicare coverage of its implantable spinal disk, Charité.
Yesterday was the end of the 30-day comment period on the proposal to designate the device as not ”reasonable and necessary” therapy for Medicare patients suffering from severe lower back pain. The stage is now set for a final ruling in mid-May.

Although lobbying by Johnson & Johnson helped to generate submissions from surgeons, patients and professional groups that overwhelmingly opposed the proposal, analysts do not expect a reversal in position by the Centers for Medicare and Medicaid Services, the agency that oversees medical insurance for 43 million people.

”We are definitely operating under the assumption that there is a no-coverage decision for Charité, despite J.& J.’s recent lobbying efforts,” said Lawrence Keusch, who follows the medical device industry for Goldman Sachs.

Such a decision by the agency would end the confusion that has led some locally administered Medicare plans to pay for the spinal surgery, which often costs as much as $50,000, while others refuse.

Because Medicare primarily covers older patients who are not considered candidates for the disk, the technology’s proponents fear that the biggest impact might be to stiffen resistance among private insurers to pay for the procedure.

Although 3,000 surgeons have been trained to implant Charité since it was approved by the Food and Drug Administration in October 2004, so few insurers cover the procedure that sales have been far below projections.

”It’s been a disappointment,” said Sarah Colamarino, a spokeswoman for the DePuy Spine unit of Johnson & Johnson, which makes the device. While sales were expected to top $100 million last year, they ended up being about one-third that level.

The Medicare decision was based on several well-known criticisms of Charité. The trials to gain F.D.A. approval did not provide data on how it would perform over the two decades or more that it is expected to last.

In addition, the trials compared the device with a form of spinal fusion no longer considered state of the art and they were designed to show that it was equivalent, not an improvement. Nor did the government find convincing evidence that Charité and other spinal disks leave patients with substantially more range of motion over time and that they do less damage to neighboring disks.

Proponents argue that the government was ignoring or playing down data that cast the disk in a more favorable light while giving too much weight to outdated reports of performance problems. And many argued that rather than refusing coverage, the government should wait for more data or, at the very least, allow coverage of Medicare patients under the age of 60.

Johnson & Johnson said that 60 insurers now cover Charité, but only 2 are nationwide. About 25 percent of the regional coverage comes from workers’ compensation companies. The spinal disk is seen as especially appealing to these companies because Charité’s unquestioned advantage in the data is that patients receiving it return to work sooner than those undergoing spinal fusion.

Part of Charite’s challenge is likely to be competition. The ProDisc-1 from Synthes, a Swiss company, is expected to receive final approval by September, the company’s head of investor relations, Peter Fehlmann, said. Medtronic and Stryker are expected to enter the market soon.

Johnson & Johnson’s rivals were alarmed last fall when it looked as if Medicare might issue a policy barring coverage of any spinal disk. The current proposed rule promises to reconsider the coverage policy for new disks as they are approved.