In the past, money was no object when cancer specialists considered which drugs would provide the best treatment for their patients.
But some top oncologists are rethinking that stance, given the soaring costs of new cancer medicines, reduced reimbursement by insurance plans and fresh research that has identified cases where cheaper generic drugs can work just as well – or better – than expensive brand-name medications.
“Doctors are starting to realize that cost actually is important, especially when high quality can be obtained at a lower cost,” said Dr. Otis Brawley, chief medical officer of the American Cancer Society. “I think that’s a transformation in medicine. I think that’s a good thing.”
U.S. spending on oncology drugs and their administration is expected to rise more than 20 percent annually for the next few years, reaching $173 billion by 2020, according to Express Scripts, which manages prescription drug benefits for employers and other clients.
As scientists unravel the biological underpinnings of cancer cells, new targeted therapies are being developed, but the process is expensive. Avastin, a drug designed to cut off a tumor’s blood supply, can cost $8,000 a month, while a course of treatment with Provenge, a therapeutic vaccine for prostate cancer, is priced at $93,000.
Researchers are also looking at whether it makes sense to combine targeted cancer therapies – potentially pushing costs well over $100,000 a year.
Drugmakers maintain that their products, despite high price tags, can save costs by reducing the need for supportive medications or even keeping patients out of the hospital.
“The oncology cost curve is unsustainable,” said Rhonda Greenapple, chief executive of Reimbursement Intelligence, a consulting firm specializing in medical reimbursement. “Affordability is more of an issue in therapy selection.”
Cost-effectiveness under the microscope
One way doctors are dealing with cost pressures is to look beyond traditional practice and payment models and explore what makes sense to deliver the best care for patients.
Wilshire Oncology Medical Group partnered last August with health insurer Anthem Blue Cross of California, a unit of WellPoint, in a pilot program aimed at improving cancer care while reining in costs. The program intends to ensure doctors and nurses are paid for the time they need to spend with patients and their families to achieve those goals.
Drug company sales representatives still visit the Southern California oncology practice, but their coupons to reimburse patients for co-pays on costly medicines are not welcome. The coupons cover patients’ costs, but can boost the overall price of treatment paid for by insurers with no guarantee of a better health outcome.
“They say, we’ll just leave these and stick the payer with the cost,” Dr. Linda Bosserman, president of Wilshire Oncology Medical Group, said during a recent meeting of the American Society of Clinical Oncology in Chicago. “But we are the payer.”
Bosserman said her group has been able to reduce drug and hospitalization costs while better engaging patients in their treatment. Instead of a mark-up on brand-name drugs, she said the oncology practice is now paid mainly for patient care.
The ASCO meeting is a major forum for presenting and publishing research on new cancer treatment breakthroughs, increasingly for drugs with annual price tags in the tens of thousands of dollars.
Of the conference’s roughly 4,500 studies this year, 44 addressed the issue of cost-effectiveness – twice as many as in 2005.
One study found that generic drugs were able to kill cultured cancer cells at least as well as brand-name drugs in most patients with non-small cell lung cancer, colon cancer and breast cancer. The researchers said they are working on a test to determine which patients might require the proprietary drugs.
Another ASCO-featured study showed that a surprisingly high portion, 20 percent, of late-stage cancer patients went without treatment between 2000 and 2008, due in part to factors such as lower income, lack of medical insurance, older age and race.
Other studies have linked burgeoning treatment costs to an increased risk of bankruptcy for people diagnosed with cancer.
Daring to touch the sacred cow
Research led by Dr. Thomas Smith of Johns Hopkins Medicine, concluded that practice patterns need to be changed, in part by using less expensive drugs and tests and more palliative care, so the system will still be able to pay for new and expensive advances.
“The issue is that cancer has always been the sacred cow no one would touch,” Greenapple said.
She said doctors are increasingly applying what has become known as a “phantom formulary,” meaning drug regimens that are tailored to an individual’s insurance coverage.
Most health plans, for instance, charge patients higher co-pays for oral drugs than they do for drugs given by injection in a doctor’s office.
“That was useful in the past because the orals were much cheaper. Now they are not,” said Ellen Licking, senior analyst at consulting firm Real Endpoints. “Oral oncologics can be prohibitively expensive … Payers are trying to think through how to redesign benefits.”
Providers are being reminded to follow guidelines from the National Comprehensive Cancer Network and other authorities that spell out the best course of therapy for patients, determined first by medical evidence, followed by toxicities and cost.
Payers are also experimenting with reimbursement models that move away from per-service fees to bundling payments for overall patient care or setting higher patient co-payments for therapies with a poor chance of success, Licking said.
Targeted cancer drugs and rising costs
Spending on prescription drugs accounts for just 10 percent of total U.S. health expenditures, but the costs more than doubled from 2000 to 2010, according to the Kaiser Family Foundation.
Part of that is due to the launch of novel drugs, some of which – like breast cancer treatment Herceptin – have transformed treatment by targeting the genetic underpinnings of cancer cells.
“When you think back, lung cancer patients were treated with just one drug and only 20 percent responded. Eighty percent were treated for nothing at very great cost,” said Mace Rothenberg, senior vice president for oncology at Pfizer.
Many new drugs are used only in specific patients who have tested positive for an underlying genetic mutation.
“Patients benefit and payers benefit because they don’t have to pay for this ineffective therapy,” Rothenberg said. “Companies benefit because they are able to show value. I see this as a win-win proposition.”
As more and more targeted cancer drugs reach the market, Bosserman of Wilshire Oncology Medical Group said her goal is to eventually sit down with competing drugmakers and see if any will begin to budge on price.
To be used consistently, an oncology drug must show a benefit for patients.
“It has got to be meaningful and it has got to be cost-effective,” she said.
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