Roche's oncologic Xeloda will be reimbursed at 90% of the average wholesale price under Medicare Part B.

The Centers for Medicare & Medicaid Services granted an "exception" to the standard Part B rate of 85% of AWP based on data submitted by Roche.

CMS published the interim final rule implementing the new Part B reimbursement policy Dec. 31 and invited sponsors to submit data to support any changes to the payment rates (¹ Also see "J&J Procrit Medicare Reimbursement Will Be 87% Of AWP Under Final Rule" - Pink Sheet, 5 January, 2004., p. 10).

CMS' ² amended decision on Xeloda (capecitabine) raises the payment allowance for the 150 mg dose to $3.21 (versus $3.03), while the payment allowance for the 500 mg dose will be $10.69 (versus $10.10). Xeloda's amended 90% AWP rate took effect Jan. 1.

Roche is an early example of a company successfully demonstrating to CMS that reimbursement rates should be higher than the standard 85% of AWP.

Genzyme successfully petitioned CMS to set 2004 reimbursement rates for its Gaucher's disease products Cerezyme and Ceredase to 94% of AWP. That data was submitted in time for the payment rate to be included in the interim final rule.

CMS is in the process of reviewing other applications for exceptions. Revised rates take effect April 1.

CMS also corrected the Medicare Part B payment allowance for Roche's CellCept (mycophenolate mofetil). The allowance is $3.21, versus the proposed $3.03. Reimbursement remains at 86% of AWP.

Although Xeloda is an oral chemotherapy agent, it is covered under Part B as a pro-drug of the injectable agent 5-FU (³ Also see "Roche Xeloda To Be Reimbursed By Medicare As Prodrug Of 5-FU" - Pink Sheet, 18 January, 1999., p. 17).

Overall, Roche does not see the Part B reimbursement changes as a significant commercial event, Worldwide Pharmaceuticals Head William Burns told analysts Feb. 4. "Our best guess is it's still plus/minus 1%," Burns said. "We don't see it as opening up a whole dramatic arena for us, and we don't see it as a major threat. So it's pretty much business as usual." Roche's analysis includes the impact of the reimbursement changes on products marketed in the U.S. by Genentech (⁴ Also see "Medicare AWP Reforms Balance Out For Genentech; Avastin Timing Right" - Pink Sheet, 19 January, 2004., p. 7).

Roche Xeloda Medicare Part B Reimbursement Raised To 90% Of AWP

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