Cellular and Gene Therapy Products

Policy No: 112
Originally Created: 04/01/2018
Section: Medicine
Last Reviewed: 01/01/2024
Last Revised: 01/01/2024
Approved: 01/11/2024
Effective: 02/01/2024
Policy Applies To: Group and Individual & Medicare Advantage

The policy applies to all providers, other health professionals, hospitals and other facilities.

Drug Component (Active Ingredients)
Any component of a drug product intended to furnish pharmacological activity or other direct effect in the diagnosis, cure, mitigation, treatment, or prevention of disease, or to affect the structure or any function of the body of humans or other animals. Active ingredients include those components of the product that may undergo chemical change during the manufacture of the drug product and be present in the drug product in a modified form intended to furnish the specified activity or effect.

FDA
The Food and Drug Administration (FDA) regulates and oversees Cellular and Gene Therapy products. The Office of Tissues and Advanced Therapies. OTAT lists products approved and licensed for cellular and gene therapy (See Reference section, #6). Note: This list contains products not subject to this policy.

National Drug Code (NDC)
Each listed drug product is assigned a unique 11 digit, 3-segment number. This number, known as the NDC, identifies the labeler, product, and trade package size. The first segment, the labeler code, is assigned by the Food and Drug Administration (FDA). A labeler is any firm that manufactures (including repackers or relabelers) or distributes (under its own name) the drug. The second segment, the product code, identifies a specific strength, dosage form, and formulation of a drug for a particular firm. Different formulations or different strengths of the same formulation should be assigned different product codes. The third segment, the package code, identifies package sizes and types. Different package codes only differentiate between different quantitative and qualitative attributes of the product packaging.

• This reimbursement policy applies to the products listed in Appendix 1.
• The products listed in Appendix 1 may also be subject to medical necessity pre-authorization (PA) review. Additional guidance for PA requirements may be found in the Medication Policy Manual.

• For the purpose of the products subject to this reimbursement policy, drug components and NDC applies to FDA approved agents/drugs.

For reimbursement evaluation, supplier or manufacturer invoice and NDC of the agents/drugs are required for the drug component(s). Drug component charges must be uniquely identified from other charges associated with the inpatient or outpatient services on a separate claim line. Drug component charges must be the facility’s actual acquisition cost by invoice. A claim line will be denied if the health plan is unable to identify the charges.

Reimbursement for the drug component(s) will be at the supplier or manufacturer invoice price. If supplier or manufacturer invoice is not provided, reimbursement will be 50% of wholesale acquisition cost (WAC) published by MediSpan.

Any off-invoice discount, rebate or refund for the drug component received by the facility must be returned in full to the health plan. Additionally, the health plan must not be billed if no payment has been made by the provider for the drug component.

1. NIH National Cancer Institute
2. Iglesias-López, C., Agustí, A., Obach, M., & Vallano, A. (2019). Regulatory Framework for Advanced Therapy Medicinal Products in Europe and United States. Frontiers in pharmacology, 10, 921
3. Registrar Corp, U.S. FDA Drug Definition
4. United States Food and Drug Administration, Vaccines, Blood & Biologics, Cellular and Gene Therapy Products, What is Gene Therapy?
5. United States Food and Drug Administration, Drug Approvals and Databases, National Drug Code Directory
6. United States Food and Drug Administration, Approved Cellular and Gene Therapy Products

Discarded Drugs and Biologicals

Medication Policy Manual

Immunological Cellar Therapies and Gene Therapies, Medical Policy Manual, Medicine, Policy No. 42

Immunological Cellar Therapies and Gene Therapies, Medicare Advantage Medical Policy Manual, Medicine, Policy No. 42