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Oncology Times:
doi: 10.1097/01.COT.0000452591.58010.b2
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National Cancer Policy Forum Studies High Cost of Oncology Drugs

Eastman, Peggy

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WASHINGTON—The National Cancer Policy Forum (NCPF) of the Institute of Medicine (IOM) probed the high cost of cancer drugs and the impact on patient access at an all-day workshop meeting here with many invited speakers. A summary report from the meeting should be available in about three to four months, according to IOM staff.

The cost of new cancer drugs has been escalating rapidly, and many patients incur thousands of dollars in out-of-pocket expenses for their medicine, noted the chair of the workshop planning committee and a past NCPF member, Peter B. Bach, MD, MAPP, of the Health Outcomes Research Group in the Department of Epidemiology and Biostatics at Memorial Sloan Kettering Cancer Center. Bach said the NCPF meeting was planned to examine recent trends in oncology care, the paradoxes of cancer drug reimbursement policies, and policy strategies to address current challenges.

Asked by OT what he hoped the meeting would accomplish, Bach said, “It's mostly about getting an overview, about defining the issues, and compiling data on the challenges. You can at least put your finger on the major drivers of the problem, which has multiple factors.”

Similarly, said NCPF Chair Michael A. Caligiuri, MD, Director of the Comprehensive Cancer Center, CEO of the James Cancer Hospital and Solove Research Institute, and Foundation Professor of Cancer Research at Ohio State University, said, “What would be ideal would be consensus on the next steps on clear pathways for patients. There is incredible confusion on these issues.” He added that he hoped the meeting would also emphasize the need for more effective patient/physician communication on treatment options, including the costs of cancer drugs.

According to IOM figures, the cost of U.S. cancer care, of which drugs are a major part, is rising faster than many sectors of medicine. In 2010 cancer care cost $125 billion, and it is expected to rise to $173 billion by 2020—a 39 percent increase.

The NCPF report “Delivering Affordable Cancer Care in the 21st Century” (OT 11/10/12 issue) concluded that the costs of cancer care will increase due to the aging of the population, a rapid influx of new cancer diagnoses, and the integration of more expensive targeted therapies and other new technological advances into clinical practice. And the American Society of Clinical Oncology, in its “The State of Cancer Care in America: 2014” report (OT 4/10/14 issue), states, “Access to high-quality cancer care will be sustained and expanded only if we address these rising costs, including the use of unnecessary tests and treatments.”

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‘Little to Constrain Soaring Prices’

One driver of the rise in U.S. cancer drug prices is that, in an arena of high research and development costs (upwards of $1 billion per new drug), there is little to constrain price, noted Kalipso Chalkidou, MD, PhD, founding director of the international program of the United Kingdom's watchdog National Institute for Health and Care Excellence (NICE), a senior advisor on international policy to the U.S. Center for Medical Technology, and a visiting faculty member of the Johns Hopkins Berman Institute for Bioethics.

In contrast to the US situation, she said, speaking from Greece, “In the UK payers are pushing back,” and there is increasing pressure to reduce cancer drug prices.

For the practicing community oncologist, the cost of providing cancer drugs to patients “is a very expensive endeavor,” said Bruce J. Gould, MD, Medical Director of Northwest Georgia Oncology Centers, P.C., and Vice President of the Community Oncology Alliance. At the workshop, he described how the cost for the typical community oncologist's cost of maintaining a drug inventory has grown from $500,000 in years past to about $1.2 million today.

“Community oncology was hit really hard by sequestration,” which has exacerbated the declining reimbursement for chemotherapy administration, he said.

He said he worries about how the effect of rising cancer drug costs, combined with a higher administrative burden, will affect access to cancer care in the community: “It used to be said that 80 percent of cancer patients receive care in the community; now that number is down to 50 to 60 percent,” with more and more patients receiving care in the hospital setting.

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Oncology Medical Home Model

This trend is headed in the wrong direction for the US economy, since for Medicare patients the cost of receiving chemotherapy in the hospital can be 20 to 50 percent higher in the hospital (and also less convenient for many of them).

“I believe community oncology is worth saving,” Gould said, citing the oncology medical home model, in which the oncologist takes responsibility for managing the patient, as one solution to keeping community oncology strong.

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Bundling Costs

In addition to the oncology medical home model, another approach to keeping cancer care costs—including drug costs—under control is bundling services. “We're very excited about bundled payments for cancer care,” said Thomas W. Feeley, MD, the Helen Shafer Fly Distinguished Professor of Anesthesiology and head of both the Division of Anesthesiology and Critical Care and the Institute for Cancer Care Innovation at the University of Texas MD Anderson Cancer Center.

He said MD Anderson intends to launch a bundled payment pilot program this September for head and neck cancers. “At MD Anderson we think we can do this,” Feeley said, because MD Anderson is a fully integrated practice unit delivery system and because all of its physicians are salaried.

To be successful, he explained, the bundle must: reflect the true cost of care; capture the efforts of the entire multidisciplinary care team; and be tied to reasonable, meaningful outcomes. “Will physicians embrace this change?” he wondered. And how would payments be distributed in practices that are not fully integrated like MD Anderson?

Marc Hartstein, MPP, Director of the Hospital and Ambulatory Policy Group of the Centers for Medicare and Medicaid Services, said CMS is well aware that when pricing methodology shifts, sites for providing care shift. This is one reason that more patients are receiving chemotherapy in hospitals (which receive higher payment for facilities services).

Hartstein added that he knows that private payers often tend to adopt Medicare's payment rates, but he cautioned against that as a general practice, noting that Medicare is a program for the elderly and disabled, and its payment rates are based primarily on utilization data in the 65-plus age group.

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Patient-Doctor Communication

Cancer patients without prescription drug insurance can incur thousands of dollars in uncompensated costs, emphasized S. Yousuf Zafar, MD, MHS, Associate Professor of Medicine at Duke Cancer Institute and Duke Clinical Research Institute.

Zafar noted that some of his patients are on cancer drugs that cost $15,000 to $30,000 a month—specifically, biologicals and oral therapies tend to be among the most expensive drugs. Not only is insurance becoming more expensive, but patient cost-sharing is increasing as well. Unfortunately, “high co-pays decrease compliance,” he said. “We're seeing a growing list of financial toxicities due to higher out-of-pocket costs.”

Zafar also stressed the importance of oncologists and patients talking about cancer drug costs, citing a survey showing that 57 percent of patients said talking to their physicians helped to reduce their out-of-pocket costs for cancer care. He noted that he and his colleagues are now working on a Web-based app to help cancer patients obtain financial assistance and encourage them to talk to their physicians about reducing their out-of-pocket costs.

Also speaking, Shelly Fuld Nasso, MPP, CEO of the National Coalition for Cancer Survivorship, agreed that cancer patients need to be given the option of talking seriously about the costs of their medications with their oncologists. Some patients want to have this discussion and some don't, she noted.

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Factors Driving High Costs

Peyton Howell, MHA, President of Global Sourcing & Manufacturer Relations for AmerisourceBergen Corporation, a generic-drugs provider and purchasing organization, said that high costs for cancer drugs are now being coupled with drug shortages and supply issues, and when this happens drug costs almost always rise even higher. She cited data from a survey published last year in the New England Journal of Medicine that found that 82.7 percent of oncologists said they were unable to prescribe their preferred chemotherapy agent at least once in the last six months.

Among the factors driving high costs for cancer drugs, she said, were the following: manufacturing quality challenges; reimbursement constraints on generic products; maturing product portfolios; limited market capacity; and manufacturing complexity and cost.

In this environment, “it's very common to see only one or two manufacturers for life-saving products,” she said. She suggested more collaboration and discussion among providers, manufacturers, and pharmaceutical distributors in order to improve how cancer drug supply issues are managed. And she praised ASCO for “doing a fantastic job of bringing value into the discussion.”

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Keynote Address

In a keynote address, Alex Bastian, MBA, Vice President for Market Access (Health) in the San Francisco office of GfK Custom Research, LLC, said that one reason new cancer drugs are so costly is that “the price of drugs pays for future innovation.” So in a sense an expensive new drug is bankrolling research and development on future innovative investigational therapies.

He noted that in cancer care, “the focus is going to continue to remain on drugs; there's a lot of hope out there.” Specifically, Bastian cited new therapies in the field of immunotherapy. The high cost of hope is hardly a new phenomenon, though, he said, showing slides of news articles on the high cost of drugs dating back to the late 1800s.

Several speakers specifically addressed the high cost of oral cancer drugs. “We're beginning to believe cancer could be a chronic disease,” and that was the theory behind the use of oral medications versus a “carpet bombing” of intravenous chemotherapy, said Lee N. Newcomer, MD, MHA, Senior Vice President of UnitedHealthcare.

But, he cautioned, “These orals are not that benign—toxicity does not go away with orals.” So, he noted, the oncologist must continue to monitor the patient on an oral drug carefully for toxicity. Also, it is harder to change the dose of an oral medication. So, he said, when it comes to cancer drugs, the question to ask, irrespective of whether a medicine is oral or IV, is: “What drug is best for my patient?”

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Cost-Sharing

A. Mark Fendrick, MD, Professor in the University of Michigan's Division of General Medicine and Department of Health Management and Policy and Director of the Center for Value-Based Insurance Design and the Health Services Research Core Lab, discussed his new coauthored white paper, “Supporting Consumer Access to Specialty Medications Through Value-Based Insurance Design,” which suggests that cancer patient cost-sharing can be used to encourage patients to select high-performing providers and settings for their care.

The concept, he explained, is for insurance plans to direct consumers to high-volume, high-quality providers, and thereby lower the patients' cost-sharing. Yardsticks of a high-volume, high-quality provider are, for example, designation as a center of excellence; consistent use of evidence-based clinical pathways; a tendency to engage patients appropriately in key decisions; and a tendency to avoid costly services when their use will not affect treatment decisions.

“Attention should turn from how much to how well we spend our health care dollars,” Fendrick summed up.

Wolters Kluwer Health | Lippincott Williams & Wilkins

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