HCFA gives PET market a dose of good news with decision to reimburse rubidium-82 studies

April 12, 1995

PET camera vendor Positron expected to benefitThe long-suffering PET industry received a needed boost last monthwhen the Health Care Financing Administration indicated that itwould provide Medicare reimbursement for myocardial perfusionstudies

PET camera vendor Positron expected to benefit

The long-suffering PET industry received a needed boost last monthwhen the Health Care Financing Administration indicated that itwould provide Medicare reimbursement for myocardial perfusionstudies using rubidium-82. The decision is a victory for the entireindustry but will especially benefit two companies: Bracco Diagnostics,which manufactures CardioGen, a rubidium-82-based radioisotope;and Positron, which makes PET cameras optimized to detect thetracer. Positron's stock price jumped 29% to $4.50 a share onthe news.

HCFA's decision was communicated to Bracco March 21 at a PETindustry meeting in Washington, DC. The reimbursement order reportedlywas signed March 14 and will be retroactive to that date, accordingto an industry source. It ends a long struggle for Medicare reimbursementdating back to 1989, when the Food and Drug Administration approvedCardioGen, which was developed by Bracco's predecessor, SquibbDiagnostics.

Positron believes that Medicare reimbursement for rubidiumstudies will lead to increased sales of its cameras. The companyhas been treading water for the past several years as it awaitedword from HCFA, but now is positioned to realize whatever purchasingactivity results from the HCFA decision, according to Howard Baker,vice president of sales for the Houston company.

"It is a big milestone," Baker said. "We thinkwe will gain a fair number of orders."

Every rubidium site in the U.S. uses a Positron camera, Bakersaid. Baker expects that HCFA will set the global reimbursementlevel for a PET exam between $1800 to $2000 per study.

HCFA's decision follows by about a month the FDA's decree thatit will regulate cyclotron-produced radioisotopes such as fluorodeoxyglucose-18under its Good Manufacturing Practices (GMP) rules (SCAN 3/15/95).This will require cyclotron facilities to submit new drug applications(NDAs) before their formulations of FDG-18 can be used clinically.

The FDA decision does not affect rubidium-82 because it isproduced in a generator, Baker said. He pointed out that the rulingimpacts not only PET imaging with FDG but also SPECT imaging usingFDG and 511-KeV collimators. Clinicians are exploring the techniqueas an alternative to PET.

"I think it was as much of a blow against SPECT as itwas against PET," Baker said. "You can buy a (511-KeV)collimator for $10,000 or $15,000."

Despite the regulatory red tape, Baker sees a bright futureahead for PET imaging. The clinical utility of rubidium-82 hasbeen proven in the years since CardioGen was approved. PET involvesa big cash outlay up front but is a money-saver over the longhaul because it can replace other procedures, he said.

Cyclotron-based PET imaging will come along despite the NDAroadblock, Baker believes. The clinical PET site of the futurewill use generator-produced rubidium as well as radioisotopeslike FDG that are supplied by regional cyclotrons that have theresources to weather the NDA process.

"The next step will be FDA approval of FDG for globaluse, whereas right now it is approved for epilepsy, and then forregional pharmacies or centers to be able to transport FDG,"Baker said. "Regional cyclotrons plus generator-producedisotopes are a home run."