Officials of the Medicare program revealed Wednesday that it will be paying an amount of $93,000 for the prostate cancer drug Provenge, an innovative therapy that extends the life expectancy of men suffering from an incurable stage to an additional four months.

According to the Center for Medicare and Medicaid, Provenge is a “reasonable and necessary” medicine. This would ensure that prostate cancer sufferers would be able to avail of the drug cure through their Medicare coverage. Analysts expect that Provenge would rake in sales amounting to $1billion by 2012. The deal is set to be finalized by June 30, 2011. This is an important step for Dendreon, the company that manufactured Provenge, as most sufferers are more than 65 years old.

Medicare is prohibited by law from considering costs when paying for a new drug. Provenge was approved by the Food and Drug Administration last April 2010 and as such it qualifies for automatic coverage from Medicare. The drug is a breakthrough treatment that a single dose is designed to work with the immune system of the patient.

According to Dendreon, the cost of Provenge covers the over $1 billion spent for research and development. Patients who have already tried the drug said that the median survival time is two times greater than chemotherapy, which involves significant complications.

Most of the biologically-engineered drugs for cancer cost around $100,000, such as the therapies provided by Roche and Eli Lilly & Co. Yervoy, the recently approved drug for melanoma, was approved last week by the FDA will have a price tag of $120,000 per patient.

Provenge is considered as the first cancer drug approved by the FDA that utilizes the human immune system for fighting the disease, making it a viable alternative to chemotherapy drugs which fight off cancerous and healthy cells simultaneously. It was designed for prostate cancer sufferers whose disease has already spread in various parts of the body and is no longer reacting to hormone therapy or radiation.

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