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In April 2005 the Centers for Medicare and Medicaid Services (CMS) posted on its Web site a draft guidance document describing a new approach to coverage policy called "coverage with evidence development" (CED). CED offered an option for coverage of promising drugs, biologics, devices, diagnostics, and procedures that would not otherwise meet Medicare's evidentiary standards for being "reasonable and necessary." An updated guidance was posted 12 July 2006, clarifying several key statutory, regulatory, and operational issues. This paper traces the history of this policy approach, explains the rationale behind the policy, and describes the major challenges that will need to be addressed for CED to become an important advance in evidence-based coverage decision making. [ABSTRACT FROM AUTHOR]

This paper examines strategies under development by health insurers to manage biopharmaceuticals, as their use spreads beyond rare diseases and academic sub-specialists to common conditions and community-based practices. Emphasis is placed on medical management (formulary placement and prior authorization), network design (physician contracting and drug distribution), and benefit design (coinsurance and annual payment limits). Contemporary initiatives are modest in ambition but potentially lay the foundation for a framework that balances access to innovation with affordability in this dynamic industry. [ABSTRACT FROM AUTHOR]