When the Label Changes, Do Coverage Policies Follow?

For patients with treatment-resistant depression (TRD), the road to effective care is rarely a straight line. It is, more often, a years-long detour through failed medication trials, accumulating frustration, and diminishing hope.

Christine Reif-Leonhard, MD, a senior consultant and head of the TRD unit at the University Hospital Frankfurt in Germany, sees these patients regularly.

"We are a tertiary center," said Reif-Leonhard, in an interview with The American Journal of Managed Care^® (AJMC^®). "It's great to see that there are new opportunities to treat patients and to come to a quick improvement."

New real-world data from the ECHO (54135419TRD4008) study, presented at the European Psychiatric Association Congress in March 2026, have reinforced what clinicians treating TRD have long observed anecdotally: esketamine nasal spray (Spravato; Janssen Pharmaceuticals) works quickly, works durably, and continues to hold even after patients stop treatment.¹ Combined with the FDA's landmark approval of esketamine as the first monotherapy for TRD in January 2025—removing the longstanding requirement to co-administer an oral antidepressant—these developments represent a meaningful shift in the treatment landscape.²

The question that follows, particularly for managed care organizations, is whether coverage policies have kept pace with the evidence.

The Scale of the Problem

TRD is not a rare clinical edge case. It affects an estimated 30% of patients diagnosed with major depressive disorder (MDD), representing approximately 2.76 million adults in the US alone.³ The economic burden is substantial: TRD accounts for nearly half of all direct and indirect costs associated with MDD, driven by higher hospitalization rates, lost productivity, and the relentless cycling through treatment after treatment that defines the condition.⁴ Managed care organizations (MCOs) feel this burden acutely—patients with TRD consume disproportionate health care resources while achieving lower rates of remission with each successive medication trial.

Research shows that after 2 failed antidepressant courses, fewer than 1 in 6 patients achieves remission with a third or fourth medication trial.⁵ Yet standard step therapy protocols in many health plans require patients to document these failures before accessing newer options like esketamine⁶—a structure that may have made sense when the evidence base was nascent, but which now sits in growing tension with the clinical data.

"Around 47% of ECHO study participants were not working at the time of enrollment, which underscores the burden of TRD and the real-world implications it can have for patients,” wrote Tamara Werner-Kiechle, MD, Therapeutic Area Head for Neuroscience, Cardiopulmonary and Early Portfolio at Johnson & Johnson in a written response to AJMC. “Many of those same patients had already accumulated a mean of 3.8 prior treatment failures in their current depressive episode before initiating esketamine.”

A New Regulatory Footing

Esketamine first received FDA approval in 2019, but with an important restriction: it could only be used in combination with an oral antidepressant. That requirement, built into the original label and reflected in virtually every payer's coverage criteria, shaped how the drug was positioned—as a last-resort adjunct for the most refractory patients.

The January 2025 monotherapy approval changed that. The approval allows health care providers to initiate esketamine without adding a new daily oral antidepressant, which is particularly relevant for patients with significant intolerance to oral antidepressants, those with high pill burden or polypharmacy concerns, and those in need of rapid symptom relief.¹ The supporting phase 4 trial data were striking: 22.5% of patients using esketamine achieved remission by week 4, compared with 7.6% in the placebo group, with improvements in depressive symptoms observed as early as 24 hours after the first dose.

Although the monotherapy approval primarily expands labeling flexibility by allowing esketamine for TRD without mandatory combination with an oral antidepressant, it is not a claim of superior efficacy over the adjunct indication.⁷ However, the clinical implication is significant: esketamine can now stand alone as a treatment option from the start, without a patient first being required to add another antidepressant to a regimen that may already be laden with medications and side effects.

“We are pleased that esketamine has been granted approval for use as a monotherapy for people living with TRD in the US and believe it offers an important additional treatment option for healthcare professionals and patients living with TRD,” wrote Werner-Kiechle.

What the ECHO Study Adds

If the monotherapy approval changed the regulatory landscape, the ECHO study has enriched it with real-world evidence that directly addresses the questions payers and formulary committees most need answered: Does it work outside controlled trials? And does the benefit last?

The ECHO cohort enrolled 570 patients initiating esketamine in routine clinical practice across Europe and Israel—importantly, with no patient exclusions, explained Reif-Leonhard.

"In my opinion, the group of patients, the cohort, is very representative," she said. "It is real-world data, so there was no exclusion of patients. They were very severely ill, with comorbidities, so it is very representative."

She also noted that nearly half of the ECHO patients carried comorbidities—a proportion that closely mirrors the heterogeneous population seen in tertiary practice and, by extension, the real members MCOs are covering.

Additionally, depressive symptom scores improved substantially and progressively over the treatment period: mean Montgomery-Asberg Depression Rating Scale reductions of –10.3 points at week 4, –14.4 points at week 12, and –17.6 points by week 48—were all statistically significant.²

"When I discuss esketamine treatment with patients, I say, think about 7 out of 10 patients who will have a positive effect,” said Reif-Leonhard. “And now I can show them data from the ECHO trial and see there is a really strong effect over 48 weeks and still stable for a longer time, so this is good for counseling."

But the data that and carries the most direct implications for managed care cost modeling is what ECHO documented after treatment stopped. Of the 570 patients who started the variable treatment period, 301 continued into a 6-month post-treatment follow-up, with symptom stability maintained across that entire period following discontinuation of esketamine.²

Reif-Leonhard described this finding as particularly meaningful given the realities of clinical follow-up.

"I was very happy to see the ECHO findings because it's the biggest real-world data on esketamine nasal spray treatment, and especially to have the durability data and to see the durability of the effect over 6 months after discontinuation—because 6 months is a long time, and some of the patients we don't see them after treatment,” she said. “I'm happy to see that they are stable for such a long time."

For managed care, this durability signal reframes the cost-value conversation. Esketamine is not an indefinite chronic therapy for most patients; it is a time-limited intervention with a sustained benefit that extends well beyond the treatment period. That is a materially different budget impact story than one built on an assumption of continuous use.

Rethinking Step Therapy

Most payer prior authorization criteria for esketamine were written in 2019 or shortly thereafter, built around a drug that required co-administration with an oral antidepressant and was positioned as a third- or fourth-line option after multiple documented failures. The monotherapy approval and the accumulating real-world evidence have not automatically prompted a revision of these criteria.

Many commercial payer policies still carry language requiring concurrent oral antidepressant use—despite the updated label—and nearly all continue to mandate documented failure of at least 2 prior antidepressant trials before esketamine is accessible.⁶ A 2025 cross-sectional analysis of 165 Medicaid policy-making entities found that 96% of those entities that covered esketamine required prior authorization, and that because MCOs control 60.6% of Medicaid decision points, intrastate inconsistencies are common, producing predictable delays and unequal access for beneficiaries in the same state.

“We know from previous studies that the more steps of treatment you have, the lower the chance of coming to remission is," said Reif-Leonhard. "Esketamine nasal spray is approved as a third-line therapy, and that's where I see it. I would not wait 5 or 6 or 7 cycles in advance. We should try to implement it as a third-line therapy."

She also noted a nuance that US payers should register: the monotherapy indication does not yet exist in Europe.

"I would really like to have the opportunity to give it as a monotherapy, as you have in the States," she said. "We don't have it yet it's complicated with approval. But of course, if we had it as a monotherapy, it would go even earlier in the treatment process."

Infrastructure as a Hidden Access Barrier

Coverage on paper and care in practice are not the same thing. Esketamine's REMS program requires in-clinic administration and approximately 2 hours of post-dose monitoring—a legitimate patient safety requirement that nonetheless creates real operational overhead for providers. Reif-Leonhard identified this infrastructure mismatch as a significant, underappreciated barrier to broader uptake in her own system.

"In Germany, the monitoring time is not adequately refunded—only the treatment," she said. "This is the reason why some of the psychiatrists in practice don't use it as much as they could, because there is no adequate reimbursement of monitoring time."

The German example translates directly to the US managed care context. Even where coverage exists, if the reimbursement structure does not adequately account for the clinical infrastructure required to administer esketamine safely, the practical effect is restricted access—felt most acutely in community psychiatric practices that lack the resources of university hospital systems. Reif-Leonhard's broader ambition reflects a goal shared by clinicians and health systems on both sides.

"What we try in Germany is to bring this therapy into the field, so that it's widened to not only university hospitals, but also in clinical practice,” she said.

Looking Ahead

The ECHO data and the monotherapy approval together present MCOs with a choice: treat the evolving evidence as a prompt to revisit coverage criteria that were written for a different regulatory moment or continue to apply step therapy requirements and concurrent medication mandates that the label no longer supports.

The most important unanswered question in the field, according to Reif-Leonhard, is patient selection—specifically, the identification of biomarkers that can predict who will benefit most from esketamine before treatment begins.

"We don't, at the moment, have real biomarkers," she noted. "Biomarkers, or personalized or precision medicine — that's what we are all looking for. We are looking for whether it's EEG [electroencephalogram], or laboratory findings, or MRI [magnetic resonance imaging] scan. We are not there yet, but there is a lot of research, and I hope we will find the answer for this, to better identify the subpopulation."

Until then, the clinical evidence available from ECHO makes a compelling case that the current evidentiary standard for esketamine has outgrown the coverage infrastructure built around it. For MCOs, the practical question is no longer whether esketamine works in routine practice. It is whether their policies are built to reflect that.

References

1. Spravato (esketamine) approved in the US as the first and only monotherapy for adults with treatment-resistant depression. Johnson & Johnson. News release. January 21, 2025. Accessed April 13, 2026. https://www.jnj.com/media-center/press-releases/spravato-esketamine-approved-in-the-u-s-as-the-first-and-only-monotherapy-for-adults-with-treatment-resistant-depression

2. Steinzor P. Esketamine nasal spray shows rapid, durable effectiveness in treatment-resistant depression. AJMC. April 1, 2026. Accessed April 13, 2026. https://www.ajmc.com/view/esketamine-nasal-spray-shows-rapid-durable-effectiveness-in-treatment-resistant-depression

3. Zhdanava M, Pilon D, Ghelerter I, et al. The prevalence and national burden of treatment-resistant depression and major depressive disorder in the United States. J Clin Psychiatry. 2021;82(2):20m13699. doi:10.4088/JCP.20m13699

4. Mrazek DA, Hornberger JC, Altar CA, et al. A review of the clinical, economic, and societal burden of treatment-resistant depression: 1996-2013. Psychiatr Serv. 2014;65(8):977-87. doi:10.1176/appi.ps.201300059

5. Baig-Ward KM, Jha MK, Trivedi MH. The individual and societal burden of treatment-resistant depression: an overview. Psychiatr Clin North Am. 2023;46(2):211-226. doi:10.1016/j.psc.2023.02.001

6. Alvear M. Medicaid coverage of esketamine and ketamine therapies: cross-sectional policy analysis across 51 jurisdictions and 165 coverage entities. SSRN. August 31, 2025. Accessed April 13, 2026. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5450234

7. Malleza S. 2025 in review: FDA approvals, practice guidelines, and label changes in psychiatry. Psychopharmacology Institute. December 18, 2025. Accessed April 13, 2026. https://psychopharmacologyinstitute.com/publication/2025-in-review-fda-approvals-practice-guidelines-and-label-changes-in-psychiatry/