Crescendo Bioscience won Medicare coverage for its rheumatoid arthritis molecular diagnostic, a major milestone and pivotal move in its bid to expand the test's market reach.
Medicare contractor Palmetto GBA's decision to establish national coverage for Crescendo's Vectra DA test is a significant accomplishment considering that federal reimbursement has become increasingly challenging to obtain for makers of new molecular diagnostics tests. It's no less crucial, however. Medicare coverage often leads the way for private insurance reimbursement. Without either option in place, it is more difficult to reach a broader, targeted patient population, and a diagnostic test is left with limited revenue potential.
"With this decision, all RA patients enrolled with Medicare will now have access to this important test," Crescendo president and CEO William Hagstrom told FierceMedicalDevices via email. "Now [neither] they nor their physicians have to worry about denials or copays."
Crescendo's CLIA-certified test measures 12 different biomarkers common to rheumatoid arthritis, giving doctors a starting point from which to assess how a patient is doing at a given point in time. While Vectra DA has been marketed since 2010, Medicare coverage opens up a whole new patient base. The company has been revving up all year to expand its commercialization efforts anyway, fueled by a $28 million Series D financing in early January. Since then, Crescendo has added sales force staff and moved ahead with plans to scale up its manufacturing and boost laboratory capacity.
Hagstrom told us that winning Medicare reimbursement is an important step for Crescendo toward obtaining coverage from commercial payers.
"With this decision, Crescendo can focus its efforts in this area and show strong, evidence-based reasons for coverage," Hagstrom said. "We believe that we have a strong value proposition for private payers as RA is a very expensive disease with significant direct and indirect costs."
Hagstrom said that RA drug costs reflect as much as 27% of the specialty drug cost for a typical plan. He added that fewer than 20% of patients are in clinical remission and under treatment, even though studies have shown that number could be much higher, and argues that Vectra DA can be used to help boost those remission numbers.
"One of the keys to closing this performance gap is the use of a quantitative, objective reproducible tool like Vectra DA," he added.
Crescendo obtained Medicare reimbursement through Palmetto GBA's new Molecular Diagnostic Services Program, and Hagstrom said the company was among the first molecular diagnostics companies to do so.
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