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Home / Business / Companies

US contractor upholds Pacific Edge’s Medicare ban

NZME.
28 Jul, 2023 12:30 AM3 mins to read

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Pacific Edge has an uphill battle ahead to convince the US regulator its product is suitable. Photo / Thinkstock

Pacific Edge has an uphill battle ahead to convince the US regulator its product is suitable. Photo / Thinkstock

Shares in Pacific Edge plunged on the NZX this morning after its flagship Cxbladder cancer testing was deemed as “not considered medically reasonable and necessary” by the company’s United States Medicare administrator.

The statement is in a new proposed Local Coverage Determination (LCD) for Medicare and is a fresh blow for the company’s hopes to quickly regain long-term access to the Medicare system for its bladder cancer tests.

Medicare is Pacific Edge’s largest customer.

The new LCD was released overnight NZ time by Novitas, Pacific Edge’s Medicare Administrative Contractor (MAC), following Pacific Edge’s annual meeting on July 27.

Just after noon, Pacific Edge’s shares (PEB) had dropped 24 per cent to 13¢.

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The LCD covers several genetic diagnostic tests from companies, including Pacific Edge. Novitas has cited a section of the US Social Security Act that rules no Medicare payment may be made “for items or services which are not reasonable and necessary for the diagnosis or treatment of illness or injury”.

In a July 27 statement, Pacific Edge said the new LCD mostly followed the same approach as an earlier LCD on genetic testing for cancer diagnosis that was released in June and then withdrawn in July.

That withdrawal had followed a concerted legal and political campaign by Pacific Edge and its industry partners, it said.

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A key difference with the new LCD is that Pacific Edge and other affected companies will have 45 days to respond from July 27, along with a public meeting on Aug 11.

Pacific Edge chief executive Peter Meintjes said it supported Novitas’ efforts “to ensure that Medicare only pays for analytically valid, clinically valid and clinically useful tests”.

‘Misunderstood’

The company claims Novitas has misunderstood the intended use of the non-invasive Cxbladder tests for bladder cancer.

They were intended to rule out patients who would otherwise receive an unnecessary cystoscopy, Meintjes said.

“This has significant clinical value to physicians, patients and payers like Medicare.”

The company was well prepared for the August meeting, where it would focus on the clinical value of Cxbladder to Medicare patients, Meintjes said.

Pacific Edge said Novitas could take up to 365 days from the July 27 publication of the LCD before it withdrew or finalised the new LCD.

In the meantime, the company was still billing Medicare and Medicare Advantage and receiving reimbursement under arrangements that had been in place since 2020.

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If the new LCD is upheld, it could take up to four years to regain access to Medicare for Cxbladder, Pacific Edge’s annual meeting was told. The company is planning further clinical testing to shore up the credentials of its technology.

Research history

Cxbladder tests the messenger RNA in a urine sample for levels of specific biomarkers, which are higher for patients positive for bladder cancer than for those who are negative for the disease.

The website for the Centres for Medicare & Medicaid Services (CMS) laid out the evidence for Cxbladder. It cited studies in 2017 and 2018 that found urologists using Cxbladder ordered fewer invasive tests and an increased number of tests and procedures for higher-risk patients.

Other researchers found the risk of missing a significant cancer when using the Cxbladder triage test was “very low and clinically acceptable”.

However, a 2022 systemic review of five urinary biomarker tests, including from Pacific Edge, concluded: “There are not enough data to support their use in the initial diagnosis setting.”

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