Updated: Medicare announced on Wednesday that it would pay for Dendreon’s prostate cancer drug Provenge, whose $93,000 price tag had ignited debate about the cost and effectiveness of cancer drugs.

The Centers for Medicare and Medicaid Services said in a memo posted on its Web site that Provenge was a “reasonable and necessary” treatment for Medicare patients who had the stage of prostate cancer for which the drug was approved by the Food and Drug Administration last April.

However, it said the evidence was “virtually nil” that Provenge was effective for men who had other stages of the disease and therefore it did not believe those so-called off-label uses should be reimbursed.

The proposed coverage plan was generally expected since it was line with the findings of a Medicare advisory committee last November. The proposed decision will be open for public comment, with a final decision expected in June.

Medicare generally pays for drugs that receive F.D.A. approval. So the decision of the agency to even undertake a formal “national coverage determination” aroused some controversy.

Some securities analysts, investors in Dendreon and patient advocates said Medicare’s move represented the start of a crackdown on high-price drugs, or even the beginning of the “health care rationing” that critics of the new federal health care legislation assert would accompany it.

Medicare officials denied this, saying they merely wanted a uniform payment policy, rather than leaving the decision to regional Medicare contractors. The officials also said that Provenge raised some novel questions because it resembled a treatment process more than a mass-produced drug.

Some health care experts have been arguing that society cannot continue to pay for cancer drugs that extend lives by only a few months, if that much. In the main clinical trial testing of Provenge, men with advanced prostate cancer who received the drug lived a median of about 26 months, about four months longer than those who got a placebo.

In November, an advisory committee to Medicare expressed a fairly high level of confidence in the evidence demonstrating that Provenge prolonged lives, at least for the type of patients included in the clinical trials.

But the committee, which did not consider the cost of the drug, said the evidence was not convincing that Provenge would help men who had earlier-stage or later-stage prostate cancer than the men in the trials.

In the memo on Wednesday, Medicare officials said they would not put in place a blanket national ban on reimbursement for off-label uses of Provenge, leaving it instead to local Medicare contractors to develop policies. But the memo said Medicare officials hoped all such off-label uses would be only in clinical trials.

“We may, if this turns out to be an overly optimistic viewpoint, reconsider this N.C.D. to ensure that Medicare coverage is restricted to uses that are supported by robust evidence,” the memo said.

Provenge is approved for men whose cancer has spread beyond the prostate gland and who are no longer responding to androgen-deprivation therapy, yet still have minimal or no symptoms.

Medicare said it received 657 public comments during its deliberations over Provenge, of which 620, or 94.4 percent, were in favor of it paying for the drug.

Provenge is sometimes called a cancer vaccine because it harnesses the body’s own immune system to fight the cancer. Immune system blood cells are removed from a patient and incubated by Dendreon with a genetically engineered protein that, in a sense, trains the immune cells to recognize and attack prostate tumors. The immune system cells are then infused back into the patient.

Dr. J. Leonard Lichtenfeld, deputy medical director of the American Cancer Society, said Wednesday’s decision was one “that they had to come to” given Medicare statutes. He said he was surprised that the decision left open the door for off-label use by delegating those decisions to local Medicare carriers.

“If they were going to pick a battle, they elected not to pick it at this particular point in time,” Dr. Lichtenfeld said, referring to the cost of the cancer drugs. But he added, “I think inevitably we’re going to have that discussion in one way, shape or form,” he said.

Just last week, Bristol-Myers Squibb set a price of $120,000 for a full course of treatment with its newly approved drug for the skin cancer melanoma.

As with Provenge, that drug, Yervoy, prolonged survival by about four months. In a clinical trial, those who got the drug lived a median of 10 months, compared with 6.4 months for those in a control group.

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