Arming Providers and Payers with Treatment- and Value-Based Management Tools for Battling Cancer

August 2015 Vol 8, Special Issue: Payers' Perspectives in Oncology
Matthew Mitchell, PharmD, MBA, FAMCP

Oncology continues to be a top priority of utilization review, drug and cancer-type evaluation, and attempts at appropriate management for payers. This year’s annual meeting of the American Society of Clinical Oncology (ASCO) again was full of information to arm providers and payers alike with ammunition to continue the ongoing battle against cancer from treatment- and value-based management perspectives.

A few years ago, many payers wondered if the initial WACs (whole acquisition costs) for new drugs would start to plateau, but this has not been the case so far. Although medical care is not a truly free market, drug manufacturers are still able to release pharmaceuticals according to “what the market will bear,” as has been suggested by healthcare stakeholders. At the ASCO 2015 meeting, Leonard B. Saltz, MD, suggested that there’s a tipping point that we will have to be able to search for in terms of the cost of drugs. He figures that the cost of using a new combination immunotherapy regimen could hit $1 million for 1 patient, with a typical out-of-pocket spending of $60,000. Dr Saltz further stated that with the continuation of this trend, by 2028 the out-of-pocket cost for a patient would require 100% of his or her household income. He cited the example of 1 new therapy, pembrolizumab, which demands the price of more than $16,000 monthly, and this will likely increase as the drug dose is pushed up.

Solving this problem of ever-growing cost of drugs with the trifecta of the US Food and Drug Administration (which does not consider drug price), the Centers for Medicare & Medicaid Services (CMS; as a majority payer), and Congress (which seems unwilling to create laws to address the situation) appears unlikely at least in the near term.

Although targeted therapy gets the majority of attention in oncology, Nicholas David James, MD, PhD, reviewed the survival rate results in the STAMPEDE trial, which investigated long-term treatment with the nontargeted therapy, docetaxel. The results of this trial demonstrated increased overall survival in patients with hormone-naïve metastatic prostate cancer when used in the first-line setting. For men with nonmetastatic disease, docetaxel increased progression-free survival, but there is uncertainty about its effect on overall survival.

Based on these data, Dr James suggested that docetaxel should be offered as standard procedure to patients with nonmetastatic prostate cancer who have received hormone treatment. Despite the rash to use new therapies, docetaxel continues to be the backbone of treatment for men with prostate cancer, in combination with other traditional chemotherapies, or with targeted therapy.

One only needs to attend a specialty drug conference, such as the Armada Specialty Pharmacy Summit or the Academy of Managed Care Pharmacy annual meeting, or read a journal with a topic of specialty drugs, or to spend time evaluating healthcare stocks, to hear about the gross pipeline of oncology drugs. The top of mind class is currently the immunotherapies, in particular the anti–programmed-cell death (PD)-1 and PD-ligand 1 (PD-L1) class.

And ASCO 2015 was certainly no exception in this regard. Michael B. Atkins, MD, listed examples of current cancer targets that are likely upcoming targets, including for melanoma, renal-cell carcinoma, and lung cancer, and soon to include head and neck cancer, Hodgkin lymphoma, bladder, gastric, breast, ovarian, and other cancers.
Suzanne L. Topalian, MD, stated that “the immune system is in many ways the ‘ideal’ anticancer weapon.”

Immunotherapies have demonstrated efficacy as monotherapies, and when used in combination, they appear to enhance the effect of each of these drugs. The physical toxicities may be a particular challenge with this relatively new class of drugs. Although immunotherapies are a hot topic, other novel drugs are also filling the oncology pipeline. A payer would be naïve to think that the financial impacts of the PD-1/PD-L1 class and other novel drugs do not warrant continued evaluation of management strategies for other drug classes.

Many payers and providers agree that continuing the traditional strategy of building a model based on drug margin is not a value-based approach and does not incentivize the best tactic to incorporate care for patients. Harold D. Miller reminds us of ASCO’s oncology practice benchmark, in which the fee-for-service model covers only approximately 66% of the cost of oncology practices. The other 33% comes from drug margin, about which Mr Miller stated, “Oncology practices couldn’t stay afloat today if it weren’t for the drug margins.”

ASCO proposes upfront payment to cover ancillary services, a monthly care management payment, and a smaller monthly fee after treatment for up to 6 months, with extra money paid for patients in clinical trials. The estimated payment beyond the fee-for-service cost would be $2100, on average, per patient. These changes could save CMS 4% of its overall expenses by reducing emergency department visits, hospital admissions, and unnecessary testing and imaging, as well as by using more cost-effective therapies and promoting appropriate end-of-life care.

ASCO has been at the forefront of promoting appropriate cost-effective care, with a focus on quality. One example includes the Quality Oncology Practice Initiative standards, and last year, ASCO released its Choosing Wisely guidelines. Many regional health plans have instituted management plans similar to the suggestions listed by Mr Miller, and there are also several national payer examples.

One such national payment model includes Anthem’s Cancer Care Quality Program. According to Jennifer Malin, MD, PhD, who discussed Anthem’s reimbursement pathway for oncology services at ASCO 2015, “The goal of the program is to improve the quality of care of our members by decreasing the unwarranted variation [in care] and getting effecting treatments….The pathway includes the most cost-effective pathway.” With this program, providers of this health plan may receive payments of $350 per member per month while they are following Anthem’s pathway rather than paying for patient-centered care via drug margins.

Payers will continue to evaluate the national and regional oncology management strategies to find a solution that makes sense in their efforts and considers the value of oncology treatments, by promoting cost-effective and appropriate therapies. This needs to be done in conjunction with programs that are aimed at improving the quality for care for patients.

Last modified: August 19, 2015
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