The Cost Of Cancer Meds Influences Treatment
10 CommentsBy Ed Silverman // January 21st, 2010 // 6:44 am
A survey of 1,379 oncologists indicates rising drug costs are influencing practice, even as they generally don’t communicate with patients about costs. The findings, published in Health Affairs show 84 percent of oncologists say patient out-of-pocket spending influences treatment recommendations and 56 percent strongly or somewhat agreed that costs influence their treatment decisions. Yet only 43 percent always or frequently discuss costs with patients. The survey notes prices rose 14 percent annually in recent years.
Meanwhile, 73 percent agreed with the statement that “over the next 5 years, costs of new cancer drugs will play a more significant role in my decisions regarding which cancer treatments to recommend for my patients.” The results also found 79 percent favor more comparative effectiveness research and 80 percent support more cost-effectiveness data, but only 42 percent feel well prepared to interpret it. And 58 percent believe patients should have access to effective cancer treatment only if the treatments are cost-effective or provide good value for money. What’s good value? The most popular response, or 49 percent, was $50,001 to $100,000 per life-year gained.
The results suggest docs support federally funded comparative effectiveness research but they wish to retain a central role in making decisions about how and when to use expensive cancer meds. “This finding has special relevance in light of the recent American Recovery and Reinvestment Act, which provides $1.1 billion to fund comparative effectiveness research, and in light of provisions of health reform legislation that would expand the research even further,” the authors conclude.
Justice in MI
Gasp! Do I hear…..”rationing”…..
“What’s good value? The most popular response, or 49 percent, was $50,001 to $100,000 per life-year gained”
Observer
What does this say about the supposedly empowered patient in the US?
While I understand WHY oncologists would do this, it doesn’t say a lot for how they think about patients’ rights. On the other hand, it does seem to say a great deal about the willingness of oncology practices to help their patients get the best possible treatments.
The other issue here would seem to be the implication that industry has yet to do a really stellar job of making patient assistance initiatives user friendly for all parties (assuming this this is actually an objective).
Joana Ramos
Did the researchers study if the oncologists also felt that something needed to be done about drug prices, such as that they be controlled? or about the old issue of overpayment and/or payment rate by Medicare to oncologists for drugs administered in their offices, and all the inherent COI issues ?
The overpayments have been justified as necessary for covering unreimbursed nursing and social work services to patients ( although very few private oncology practices– where the majority of US adults are treated– have social work staff, no matter how much a holistic team approach is important).
Regarding Observer’s comments, patient assistance programs (PAPs) are at best a stop-gap measure needed today,and at worst, window-dressing to enhance a company’s ” corporate social responsibility” profile. PAPs are not a sustainable solution for many reasons, starting with the fact that they are not regulated, and exclude too many patients, plus often require onerous applications procedures.
Robert
I for one think it’s disgusting that the cost of treatment could impact the avenue a doctor takes to treat a patient. When it comes to health, cost shouldn’t matter in the least.
gpawelski
In hopes to control the high costs of cancer medicine, a new paradigm established a requirement of a companion diagnostic as a condition for approval of new “targeted” therapies.
However, it put such great pressure that the companion diagnostics that were approved often had been mostly or totally ineffective at identifying clinical responders to the various therapies. That is because genomics/epigenomics are far too limited in scope to encompass the vagaries and complexities of human cancer biology.
Although any number of labs and techniques can detect mutant genes, this area of pharmacogenomics was ripe for proprietary tests, invented alongside the drug and owned by the drug developer and/or a partner in the diagnostics field. This business opportunity evolved as more drugs were approved with companion diagnostics.
Unfortunately, the introduction of these drugs has not been accompanied by specific predictive tests allowing for a rational and economical use of the drugs. Patients, physicians, insurance carriers, and the FDA should be calling for predictive tests that allow for rational and cost-effective use of these highly expensive drugs.
Given the technical and conceptual advantages of functional profiling assays, together with their performance and the modest efficacy of therapy prediction based on analysis of genome expression, there is reason for a renewal in their interest for optimized use of medical treatment of malignant disease.
Anonymous
Don’t forget that an oncologist’s income is largely dervied from ‘hangin the bag’ and billing meds. Given the choice between a 6% yield on a $1,000 or $100,000 drug, which one do you think they would choose?
Kim
I’ve been doing a good deal of research on this topic and I think both the posting and the comments miss the core point. The “free lunch” that the specialty Rx market has been for manufacturers is coming to an end.
Health plans and employers are far more aware of the costs of these agents (administered under both pharmacy and medical benefit plans) than has been the case in the past. More importantly they are undertaking a multifaceted effort to bring ever escalating costs down. This will be more complicated than the simple three-tier co-pays that largely killed the markets for small molecule chronic disease therapies during the last decade, but it is likely to work.
First, the old style “Buy and Bill” as a major source of income for oncologists is rapidly being replaced by far less profitable “ASP Plus” pricing models. This started off as part of the Medicare Modernizations Act, but has now kicked into high gear. Instead of making huge markups on the spread between actual purchase price and Average Wholesale Price, physicians will earn a far smaller margin of 8%-10%. At the same time, patients will increasingly be facing co-insurance rather than fixed co-payments for specialty Rx products. Such co-insurance payments are likely to be in the 20%-30% range, much as we see for specialty Rx products administered under the pharmacy benefit in Medicare Part D today, except that for commercial lives, there won’t be the same sort of catastrophic cap seen in the Federal program. It will also be applied to products administered by physicians in their offices (medical benefit) as well as those self-administered by the patient (pharmacy benefit). Since the average US household earns about $60,000 per year, this will be a significant burden.
While these economic pressures are clearly a blunt instrument, they will serve their core purpose of bringing down growth rates in these markets. If manufacturers want to continue to earn good returns on these agents, they will have to demonstrate good value for money (however slippery that concept is) rather than rely on the perverse financial incentives for both patients and physicians that helped drive the sales of these agents in the past. There are several strategies that manufacturers can undertake to be responsive to the emerging requirements for success, but complaining isn’t one of them.
Fred J. Pane R.Ph.
Over the next few years, you will see a radical change in how patients are being treated. As we move to more tumor specific and patient specific care with the advancement in diagnostics (biomarkers and genomics.) Protocols that are used today may go away. There are tests that some health plans are already using, that determine what oncology drugs work the best from day 1 of treatment. The ability to treat a patient with drugs that we know will work from day 1, is significant. Not every tumor responds to a particular regimen and some tumors are resistant to some drugs. There maybe more cost up front, but the patient survival rates should increase and overall cost of care for the life of the patient, should decrease. Some payers are looking to reimburse on a tumor type and not individually for each treatment-drug, radiation, surgery, etc. In the UK, there are some treatments they won’t pay for and some companies are know giving drug for the first 6-12 weeks of treatment for free, just so they will get their product used.
The ASP reimbursment model impacted Medicare Beneficiaries in physician offices in 2005 and hospitals in 2006. Physicians get ASP + 6% in 2010 and Hospitals ASP + 4% in 2010. LEss expensive generic oncology drugs when used, the hospital will not get reimbursed for ($65 or <) in 2010. The Medicare change in 2005 moved many patients to the hospital out patient treatmnet environment.
Tech
It’s a sad situation choosing to save money instead of your health.
Leapy
I’m kind of amused that people are so surprized that money comes into the equation in choosing meds - both in terms of the cost of medicines and the reimbursements to oncologists. The US has a for profit healthcare system in which ability to pay is important. Insurance covers less as each year passes and without the best insurance, you will not get the best oncology care unless you dip into your own pocket or manage to get into a clinical trial. Rationing is already in the US, and will become more apparent whether the Obama healthcare bill gets passed or not. It is not written in the constitution that each person has a right to the best healthcare money can buy.