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Providers
Hospital leaders skeptical
the first to point out that hospital pric-
es are too high,” Gellad said. “The drug
of using cost savings to set
can save a lot of money because hospi-
tals are expensive.”
A Gilead spokesperson said the com-
price for remdesivir
pany has not yet set a price for remde-
sivir and is ensuring access through its
donation. “Post-donation, the compa-
ny will work closely with governments
and healthcare systems to provide ac-
By Rachel Cohrs with. “The pharma industry is always
cess for providers to prescribe remde-
GILEAD SCIENCES IS FACTORING sivir for appropriate patients.” .
potential savings to hospitals into Whether hospitals will ultimate-
its pricing decision for a promising ly save money will be determined by
COVID-19 treatment, but hospitals and several variables that aren’t clear yet,
health policy experts say it’s too early to but a significant factor will be how the
assess the drug’s impact. drug factors into DRG payments for
Gilead is running its own cost-sav- COVID-19.
ings analysis of remdesivir for hos- Congress chose to inflate DRG pay-
pitals, according to a SVB Leerink GETTY IMAGES/MODERN HEALTHCARE ILLUSTRATION ments for COVID-19 patients by 20%
investor note. So far hospitals have re- “There’s no guarantee during the public health emergency, but
ceived the drug for free; Gilead plans to payments will decrease after the emer-
donate enough doses by early June to (remdesivir) will always gency ends. Public health emergencies
treat more than 120,500 hospitalized shorten a hospital stay, have to be renewed every 90 days; the
COVID-19 patients. which is where most of most recent extension was on April 26.
Little data is available on remdesivir’s the savings will be.” DRG payments are based on historical
clinical effectiveness, not to mention its costs from claims data. Avalere senior
comparative- or cost-effectiveness. Dr. Walid Gellad, associate professor consultant Abby Moorman said there
of medicine and health policy at the
Christopher Fortier, chief pharmacy University of Pittsburgh could potentially be a gap when claims
officer at Massachusetts General Hos- data for COVID-19 patients are available
pital in Boston, said remdesivir has only and factored into DRG payments, but
been in use for roughly six weeks since exactly what that means for hospital the cost of remdesivir won’t be because
the Food and Drug Administration costs. hospitals got the drug for free for a while.
granted emergency use authorization New technology add-on payments,
on May 1, and the hospital is focused Two metrics that could produce or NTAPs, were introduced to help
more on studying its clinical outcomes cost savings are the length of hospital bridge that sort of gap. If CMS provides
than its cost savings. Fortier is skeptical stays and intensive-care unit admis- an NTAP, hospitals get paid some of the
of analyses that point to cost savings for sions. “There’s no guarantee that it will cost of the product if a patient’s care
certain parameters this early. always shorten a hospital stay, which is ends up costing more than the related
“There are so many compounding where most of the savings will be,” said DRG payment. A product has to meet
factors that could cause someone to be Dr. Walid Gellad, an associate profes- criteria on newness of the technology,
moved back to another floor, or moved sor of medicine and health policy at the a cost threshold, and clinical improve-
to home care. With these diseases it’s University of Pittsburgh who research- ment to be approved for an NTAP.
difficult, almost impossi- es prescribing and pre- Under the normal pathway for NTAP
ble, to come up with a hard THE TAKEAWAY scription drug use. approval, payments wouldn’t be avail-
dollar figure,” he said. Savings calculations able until October 2021. Hospitals could
Preliminary data from Gilead is factoring could be hindered be- be eligible for a maximum add-on pay-
a government-sponsored potential savings to cause hospital costs vary ment of 65% of the drug’s cost.
trial showed a median hospitals into pricing greatly across geograph- It may be possible for CMS to expe-
time to recovery of 11 days for its promising ic areas. Gellad said the dite the process to grant remdesivir an
for those treated with rem- COVID-19 treatment, issue with using hospital NTAP, Moorman said, though it hasn’t
but hospitals say
desivir, compared with 15 savings are hard to savings to justify drug been done before.
days for patients who were quantify this early. prices is that hospital CMS did not respond to a request for
not. However, it’s unclear costs are high to begin comment. l

June 8, 2020 | Modern Healthcare 7