Market Barriers to the Development of Pharmacotherapies for the Treatment of Cocaine Abuse and Addiction: Final Report. Marketing Mandated Coverage


The federal government exercised a coverage mandate in the case of clozapine. Once Sandoz separated its expensive Clozaril Patient Monitoring System (CPMS) from sales of clozapine, the Health Care Financing Administration(now known as Centers for Medicare and Medicaid Services(CMS)) (HCFA(now known as CMS)) required all state Medicaid agencies to cover the cost of clozapine therapy and provide a patient monitoring system of the providers choosing. This helped to increase patient access to clozapine and increase sales. By mandating coverage of treatment for certain conditions, the federal government can ensure that patients have access to appropriate therapies and provide incentives for pharmaceutical companies to pursue a wider market. This can lower the market barrier associated with an uncertain payment structure and result in a more favorable NPV.